The Washington Post reports:

Social Security’s trust fund is now due to run low on money beginning in 2032. And in announcing that new date Tuesday, the government acknowledged that the Trump administration’s immigration policies and tax cuts are expected to contribute to the insolvency.

The trust fund that pays retiree and survivor benefits is expected to reach depletion by the fourth quarter of 2032, one quarter earlier than projected in last year’s annual report. Social Security’s trustees said notable changes over the past year included a decline in the country’s fertility rate, a drop in immigration and the “substantial effect” of President Donald Trump’s signature tax legislation last year, which extended tax cuts from Trump’s first term and provided a deduction for seniors. At the same time, the trustees noted that average real earnings are assumed to grow, which would have a positive effect on the trust fund.

The long-standing expected shortfall comes as demographic shifts — driven by a large generation of retiring baby boomers and declining birth rates — mean there are fewer workers paying into the system for every beneficiary drawing from it. An increase in retirement benefits for government and public sector workers that took effect last year has also been expected to hasten the trust fund’s depletion.

There is a common misnomer that when the trust fund is depleted, it will be completely bankrupt and have no money left to pay retirees. Money will continue to come into the fund on a regular basis via payroll taxes but at a lower threshold than current benefits, which would result in retirees receiving smaller checks from the government. The report released Tuesday predicted that the government would need to cut monthly Social Security benefits by 22 percent beginning in 2032. [Continue reading…]