If this economic downturn is as bad as the Great Recession a decade ago, then the Social Security trust funds could run out of money in 2029, according to the Bipartisan Policy Center. After that, beneficiaries could see a 31% cut in retirement payments.

The program's trustees had projected earlier this year that the trust funds would be depleted in 2035, but that did not take the coronavirus pandemic into account.

It would be the first time the estimated insolvency date was within a decade since the crisis of the 1980s, which prompted several changes, including raising the retirement age, said Shai Akabas, the center's director of economy policy.


The [depletion] projection depends heavily on when the economy is estimated to recover. If the economy bounces back quickly, under a V-shaped recovery, the depletion date would be 2034, according to the Penn Wharton Budget Model. But a slower U-shaped recovery would accelerate that by two years to 2032.


The situation is even more dire for the Medicare trust fund, which its trustees projected earlier this year would run out of money by 2026, not taking into account the pandemic.

If employment and payroll tax revenues follow the same pattern as the Great Recession and its aftermath, the hit to the Medicare trust fund could be $175 billion between 2020 and 2023, according to an estimate by experts at the American Enterprise Institute, a right-leaning think tank. That would accelerate the depletion date by three years.

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