The 2012 Trustees Report showed that Social Security's deficit increased from 2.22 percent to 2.67 percent of taxable payroll and that funds would be exhausted by 2033 instead of the projected 2036. But, according to the Center for Retirement Research at Boston College, both of those numbers can be overcome over the next 75 years.
Once the trust fund is exhausted, "some commentators describe Social Security as 'bankrupt,' leaving the impression that the program has no money at all. But payroll tax revenues continue rolling in. So the system will still have enough revenue to pay 75 percent of currently legislated benefits after exhaustion of reserves in 2033," the report said.
Relying on current tax revenues means that in 2033 the replacement rate—benefits relative to pre-retirement earnings—for the typical worker would drop from 36 percent to 27 percent.
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