Social Security’s Financial Outlook: The 2007 Report in Perspective

Introduction

The Trustees of the Social Security system have just issued the 2007 report. The report includes projections for the system over the next 75 years, prepared by the Social Security’s Office of the Actuary. The bottom line is that the long-run outlook has remained virtually unchanged for the last thirteen years — the system has a 75-year deficit equal to about 2 percent of taxable payrolls and the trust fund faces exhaustion in the early 2040s, after which the system will be able to pay only about 70 percent of promised benefits. The clear message of the persistent deficits is that the financing shortfall should be eliminated so that people can be assured they receive the income they need in retirement.