What does the previous slide mean in plain English? It means:
- Benefit payments going out of Social Security exceed tax payments coming into Social Security; but interest earned by the trust funds currently exceeds the difference; that will change in 2022 when payments going out of Social Security will begin to exceed total revenues (tax payments plus interest) coming into Social Security.
- Because of the reserves ($2.9 trillion in 2018) in the Social Security OASI and DI Trust Funds, there is enough money to pay full benefits as promised until 2034 (that assumes the federal government is able to make good on its IOU’s).
- Then in 2034, the Trust Funds will be exhausted (completely gone). When that happens, the money being collected in taxes will be enough to pay only about 77 percent of the scheduled benefits.
- The OASI Trust Fund will be exhausted in 2035 and the DI Trust Fund will be exhausted in 2028. However, Congress can temporarily fix the DI problem by moving funds from OASI to DI. Assuming that happens, the two trust funds won’t be exhausted until 2034.