Looming retirement crisis? It’s already here, at least according to Carolyn Colvin, the Acting Commissioner of Social Security.
Colvin gave an interview with The New York Times in the wake of the release of the annual Social Security report card of the program’s trust fund. The report found that in 2015, Social Security’s reserves increased by $23 billion to $2.8 trillion by the end of the year. However, it also said its reserves will be depleted by 2034, forcing a benefit cut by 21 percent. As the Times noted, the agency currently pays out more than $800 billion a year to about 60 million retired and disabled Americans.
Colvin, according to the paper, takes the projections in stride.
“I think the program is sound. I think the fears are misplaced. Congress has always done what is necessary to ensure (Social Security’s) solvency,” Colvin said during an interview in Atlanta. “I like to believe that something will happen, but by law, we can only spend what we have. So if Congress were not to act and make the changes that would make the program fully solvent, then we could not pay the full benefit.”
However, she was quick to add it’s never happened, and Congress has always acted to ensure that “we are able to pay the full amount that is due.
However, she was more direct when commenting on the current state of retirement saving overall.
“I think as far we’re concerned, we’re in a retirement crisis right now, particularly with the Baby Boomers retiring,” she said. “The savings rate is inadequate, and so many of the jobs do not have a pension at all. With the 401(k)s, many people borrow from those with the expectation that they’re going to pay them back. And they often don’t pay them back, so they end up just with Social Security.”