Thinking long term when you have short-term problems is hard to do. That’s the situation with the financial stability of Social Security.

So much focus has been on efforts to stem the spread of the novel coronavirus, and on the economic fallout that has resulted in millions losing their jobs, that the most recent report on the financial health of the Social Security Trust Funds didn’t get much news coverage. While Social Security isn’t bankrupt, it’s certainly facing a serious shortfall in income to cover promised payments.

By next year, Social Security’s cost is estimated to exceed total income, according to the latest trustee report for the Social Security and Medicare trust funds.

“The projected cost of Social Security increases faster than projected income through 2040 primarily because the ratio of workers paying taxes to beneficiaries receiving benefits will decline as the baby-boom generation ages and is replaced at working ages with subsequent lower birthrate generations,” the trustee report said. “While the effects of the aging baby boom and subsequent lower birth rates will have largely stabilized after 2040, annual cost will continue to grow faster than income.”

The reserves of the Old-Age and Survivors Insurance Trust Fund (OASI), which pays retirement and survivor benefits, will be unable to pay full benefits in 2034, the trustee report projected. Absent legislative action to fix the shortfall, OASI will have only enough tax income to pay out 76 percent of scheduled payments, according to the trustee report.

The Disability Insurance Trust Fund, which pays disability benefits, is in slightly better shape. The fund will have enough money coming in to cover 92 percent of scheduled benefits. The fund’s reserves will be depleted in 2065, at which time 92 percent of benefits will be payable. Last year, the fund was projected to have a shortfall by 2052. The disability trust fund is healthier, in part, because applications have been decreasing since 2010. The number of disabled-worker beneficiaries receiving payments has also decreased.

Social Security paid just more than $1 trillion in benefits to about 64 million beneficiaries — 48 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 10 million disabled workers and dependents of disabled workers.

There was one major caveat in this year’s report, the trustees pointed out.

“The projections in this year’s report do not reflect the potential effects of the covid-19 pandemic on the Social Security program,” said Andrew Saul, commissioner of Social Security. “The duration and severity of the pandemic will affect the estimates presented in this year’s report and the financial status of the program, particularly in the short term.”

Millions of workers losing their jobs means a significant drop in Social Security payroll taxes. This will only exacerbate the financial crisis facing Social Security.

“The year 2035 is only 15 years away. That means the trust funds will run out of reserves when today’s 52-year-olds reach the normal retirement age and today’s youngest retirees turn 77,” according to an analysis of the trustee report by the Committee for a Responsible Federal Budget. “The current crisis will almost certainly advance the date of insolvency by several years.”

The trustees recommended that Congress address the projected trust fund shortfalls sooner rather than later, especially considering it may involve reductions in benefits or an increase in the Social Security tax.

“Social Security will play a critical role in the lives of 65 million beneficiaries and 180 million covered workers and their families during 2020,” the trustees said. “With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.”

For many people, Social Security is a financial lifeline that puts them in better shape for retirement than they think, Washington Post columnist Allan Sloan argued recently.

Fifty-seven percent of retirees rely on Social Security as their major source of income, according to a 2018 Gallup poll.

“Medicare and Social Security are more crucial than ever as Americans face the one-two punch of the coronavirus’s health and economic consequences,” said AARP chief executive Jo Ann Jenkins. “It is crucial for Congress to come together in a bipartisan way to address the long-term funding challenges to ensure individuals will get the benefits they have earned.”

With all the scrambling to mitigate the effects of the pandemic, it’s unlikely Congress will make any immediate moves to fix Social Security. Yet, it’s a problem legislators can’t continue to put off for another day.

Live Chat

Please join me on Thursday, May 28, at noon (Eastern time) for a live discussion about your money.

Reader Question of the Week

If you have a retirement question, send it to In the subject line, put “Question of the Week.”

Q: Is there anything I can do to protect my credit history from nonpayment because of a layoff due to the coronavirus?

This week’s answer comes from Chi Chi Wu, staff attorney at the National Consumer Law Center (NCLC).

Wu: The Coronavirus Aid, Relief, and Economic Security (Cares) Act addresses the credit reporting consequences of the coronavirus, but in an unfortunately inadequate manner. Section 4021 of the Cares Act only protects consumers who are approved by their creditor for a forbearance, workout or similar “accommodation.” For these consumers, Section 4021 provides the following:

— If the consumer was able to obtain the accommodation while they were still current (i.e., less than 30 days late), their accounts will still be reported as current.

— If the consumer was already delinquent when they received the accommodation, they will continue to be reported with the same delinquency status. Thus, consumers who were unable to get approved for an accommodation before they fell behind will still end up with damage to their credit reports.

— If a delinquent consumer manages to catch up during the accommodation period — hardly likely for consumers facing economic disaster — they can then be reported as current. If you are having trouble paying your bills, reach out to every single one of your creditors and ask for an accommodation.

— If you have a federally backed mortgage and have experienced hardship due to the coronavirus, you are entitled to a forbearance of six months, with a six-month extension for a total of one year. This NCLC article includes advice on how to determine if your mortgage is federally backed and information on additional federal and state mortgage protections.

— If your Direct Loan, Perkins Loan or Federal Family Education Loan is owned by the Education Department, your loans are automatically subject to a payment suspension until Sept. 30 and should be reported as current during the suspension. In all other cases, you need to contact your lender to seek relief.

Be persistent!

If you cannot obtain an accommodation from all of your creditors, you’ll need to figure out which bills you need to pay and which are lower priority. NCLC’s consumer guide “Surviving Debt” provides advice on prioritizing your bills when you have trouble paying all of them. NCLC is making the online version free during this crisis.

Retirement Rants and Raves

Your thoughts: I’m also interested in your experiences or concerns about retirement or aging. You can rant or rave. Send your comments to Please include your name, city and state. In the subject line, put “Retirement Rants and Raves.”