Don't expect Social Security or Medicare to be slashed anytime soon.
Social Security does face funding challenges. For decades it collected more than it paid out, building a surplus that stood at $2.85 trillion at the end of 2021. But the system is starting to pay out more than it takes in, largely because the retiree population is growing faster than the working population, and living longer. Without changes in how Social Security is financed, the surplus is projected to run out in 2035, according to the latest annual report from the program's trustees.
Even then, Social Security won't be broke. It will still collect tax revenue and pay benefits. But it will only bring in enough to pay 80 percent of scheduled benefits, according to the latest estimate. To avoid that outcome, Congress would need to take steps to shore up Social Security's finances, as it did in 1983, the last time the program nearly depleted its reserves. The steps then included raising the full retirement age (see Myth #2), increasing the payroll tax rate and introducing an income tax on benefits.
The United States many need to follow the progress of other advanced, democratic nations by extending Medicare to all to consolidate the risk pool and maximize efficiency to reduce cost. The costly hodgepodge of insurance demands under 'ObamaCare' makes it untenable in the long term.