Social Security Deficit Looms as Job Losses, Early Retirement Claims Increase
September 27, 2009
Baltimore, Maryland - Massive job losses and the increasing early retirement claims will result to budget deficit in Social Security as the agency is expecting to pay more benefits than the taxes it will collect over the next two years.
The Social Security Administration (SSA) said it is facing $10 billion deficit this year and $9 billion in 2011. However, the budget gap will not affect the payments of retired workers since the agency has accumulated $2.5 trillion worth of surplus from the previous years.
According to government data, retirement claims in 2009 increased by 23 percent compared to last year as unemployed seniors are forced to file for early retirement benefits.
While Social Security officials expected the increase of retirement claims since baby boomers are growing older, they did not expect the number to sky-rocket.
Meanwhile, disability claims rose by approximately 20 percent this year.
Analysts attributed the increase of claims to the growing unemployment rate and weak economy in the US.
Experts also believe that many people who have reached their retirement age are still working despite receiving their benefits.
To address the looming budget deficit, US President Barack Obama said he will tackle this issue next year.
In a survey, nearly 43 million retirees and their dependents are receiving Social Security benefits. According to SSA, the average monthly payment for retirees is $1,100.
In addition, more than 9.5 million Americans are receiving disability benefit which provides them an average monthly payment of $920.