Social Security’s Financial Outlook: The 2014 Update in Perspective

Alicia H. Munnell

IB#14-12

The brief’s key findings are:

  • The 2014 Trustees Report shows little change from last year:
    • Social Security’s 75-year deficit rose modestly to 2.88 percent of payroll.
    • But the deficit as a percent of GDP is still 1 percent.
    • And trust fund exhaustion is still 2033, after which payroll taxes still cover about three quarters of promised benefits.
  • The shortfall is manageable but, with the deficit rising to about 4 percent in two decades, action should be taken soon to avoid larger tax/benefit changes later.
  • And the disability insurance program needs immediate attention, as its trust fund is expected to be exhausted in 2016.