With the exception of Medicare, most social programs pale in scope when compared with Social Security.
Each and every month, nearly 62.5 million people receives a benefit check from the Old-Age, Survivors, and Disability Insurance Trust (OASDI). Though most of these folks are aged beneficiaries, as we would expect, the program also provides a payout to more than 10 million people covered by disability insurance, and close to 6 million people eligible for survivor benefits.
In dollar terms, the program divvied out $81 billion to beneficiaries in June, according to the latest Social Security snapshot. Roughly three-quarters of this cash ($61 billion) went to retired workers, with the remainder split up among those receiving disability insurance, survivor benefits, and the spouses and children of retired workers.
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Another Social Security milestone is just a year away
As the number of beneficiaries has grown in size, so have the checks that the Social Security Administration has had to write. In 2017, Social Security hit a never-before-seen milestone when its aggregate expenses surpassed the $1 trillion mark.
Now, keep in mind that this $1 trillion figure includes all expenses paid out from the OASDI Trust, as well as what was paid to the millions of folks receiving Supplemental Security Income. It also included about $10.9 billion in aggregate expenses pertaining to the Railroad Retirement Account and administrative expenses tied to running the program.
But if we were to look at things strictly from the perspective of OASDI payouts, next year is when the real trillion-dollar milestone mark will be hit.
According to the Social Security Board of Trustees report that was released in early June, scheduled OASDI benefits are expected to total $991.8 billion in 2018 and crest the $1 trillion mark to $1.05 trillion in 2019. These higher payouts are primarily a result of baby boomers leaving the workforce and entering retirement at a rate of roughly 4 million per year.
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This isn't a milestone you'll want to celebrate
This isn't a milestone that we'll want to break out the champagne for.
Even though Social Security has demonstrated its ability to provide coverage for existing workers and a financial foundation for retirees for nearly eight decades, its scheduled benefits are growing at a much quicker pace than its revenue. After hitting a projected $1.05 trillion in scheduled benefits in 2019, the trustees' report estimates that they could top $1.3 trillion in 2023, $1.5 trillion in 2025, and $1.7 trillion by 2027, according to the intermediate-cost model.