Study: Social Security 'going to be insolvent before anyone thinks'

According to the government, the Social Security trust fund is due to go broke in 2033. But two recent studies show that the Social Security Administration is using incorrect accounting procedures and that the fund will run out of the money years before that.


New studies from Harvard and Dartmouth researchers find that the SSA's actuarial forecasts have been consistently overstating the financial health of the program's trust funds since 2000.

"These biases are getting bigger and they are substantial," said Gary King, co-author of the studies and director of Harvard's Institute for Quantitative Social Science. "[Social Security] is going to be insolvent before everyone thinks."

Read MoreWill you miss out on Social Security benefits?

The Social Security and Medicare Trustees' 2014 report to Congress last year found trust fund reserves for both its combined retirement and disability programs will grow until 2019. Program costs are projected to exceed income in 2020 and the trust funds will be depleted by 2033 if Congress doesn't act. Once the trust funds are drained, annual revenues from payroll tax would be projected to cover only three-quarters of scheduled Social Security benefits through 2088.

Researchers examined forecasts published in the annual trustees' reports from 1978, when the reports began to consistently disclose projected financial indicators, until 2013. Then, they compared the forecasts the agency made on such variables as mortality and labor force participation rates to the actual observed data. Forecasts from trustees reports from 1978 to 2000 were roughly unbiased, researchers found. In that time, the administration made overestimates and underestimates, but the forecast errors appeared to be random in their direction.

"After 2000, forecast errors became increasingly biased, and in the same direction. Trustees Reports after 2000 all overestimated the assets in the program and overestimated solvency of the Trust Funds," wrote the researchers, who include Dartmouth professor Samir Soneji and Harvard doctoral candidate Konstantin Kashin.

The researchers don't believe there is any intentional bias, rather it is the accounting methods that are at fault. That said, Democrats who demogogue Social Security continue to demonize Republicans who point out the obvious; the farther out from insolvency we can fix the problem, the less painful it will be. That idea has been pushed strongly by Rep. Paul Ryan in his budget blueprints. 

The probability is, that we won't heed that warning until it's too late.

If you experience technical problems, please write to