Restoring Financial Sustainability to Social Security Programs

• Social Security provides retirement benefits to millions of individuals and families as well as benefits to survivors, other dependents, and disabled workers. The total long-term financing shortfall currently facing the Social Security program is significant and growing over time. It is estimated that once the Social Security trust fund balances are exhausted in 2037, annual revenue will be insufficient to pay benefits in full on a timely basis, thereby making program changes an important priority. Social Security Administration, The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds (May 2009) http://www.ssa.gov/OACT/TR/2009/index.html

Figure 2: Actual and Projected Cash Flow and Trust Fund Balances in the Combined Social Security Trust Fund, 2008-2041

Source: GAO analysis of data from the Office of the Chief Actuary, Social Security Administration.
Note: Projections based on the intermediate assumptions of the 2008 Trustees' Report. The CPI is used to adjust from current to constant dollars.

• A wide variety of options have been proposed, including changing benefits, changing revenues, or some combination of the two. Most of the options focus on restoring Social Security's long-term solvency, but a few also aim to enhance benefits for specific groups, such as widows and low earners, who are especially at risk of poverty. Regardless of what options are chosen, it will be important for policymakers to take the steps necessary to achieve the desired balance between income adequacy and individual equity while also moving toward program solvency.

  Highlights of GAO-05-649R (PDF), Highlights of GAO-06-804 (PDF)

Figure 3: Percentage of Income Type Received by Elderly (65+) Households, 2004

Source: Income of the Population 55 or Older, 2004 (Washington, D.C.: SSA, Office of Research and Statistics, 2006)

Note: A household is defined as either a married couple living together or a nonmarried person.

^ Back to topWhat Needs to Be Done

• In light of potential Social Security reform and challenges facing the country in the 21st century, Congress should consider changes to laws, programs, and policies that support retirement security, including retirement ages, in order to provide a set of incentives that work in tandem to encourage work at older ages.

  Highlights of GAO-07-753 (PDF)

^ Back to topKey Reports

Social Security Reform

Social Security Reform

Social Security

Social Security

Retirement Security

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