Social Security and Medicare will be unable to fully pay benefits in 2035 and 2036, respectively, the Social Security Board of Trustees said in their annual report.
That is an improvement from last year's report, which projected Social Security to run out by 2034 and Medicare to run dry by 2031.
"This year's report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity — any potential benefit reduction event has been pushed off from 2034 to 2035," Social Security Commissioner Martin O'Malley said in a statement. "More people are contributing to Social Security, thanks to strong economic policies that have yielded impressive wage growth, historic job creation, and a steady, low unemployment rate. So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits."
If Congress does not act to shore up the funds, the Social Security Administration will only be able to pay 83% of Social Security benefits and 89% of Medicare Part A benefits.
Experts are calling on lawmakers to work together to ensure the trust funds do not dry up.
"We are certainly heading for trouble without some kind of action, as borrowing costs will be gigantic to continue to fund the Social Security program at current (or increasing with inflation) levels," John Sedunov, professor of finance at Villanova University in Pennsylvania, told Newsweek.