While Social Security is often referred to as being in "crisis" and "close to bankruptcy," the reality of the program's long-term financing challenge presents a quite different picture.

Even if Congress were to leave Social Security untouched, the program would be able to pay currently guaranteed benefits in full until 2041, according to the program's trustees. Thereafter, about 70 percent of promised benefits could be financed. The nonpartisan Congressional Budget Office is even more optimistic: it projects that, without changes, Social Security will be able to meet its obligations in full until 2053, after which about 80 percent of benefits still could be paid for.

Even under those worst-case scenarios, decades from now the system would be far from "bankrupt," "flat-out bust," or "broke," which imply that no resources would be available to pay any benefits. At that time, workers and their employers still will be contributing payroll taxes to finance benefits for retirees. If we took this approach to every problem predicted to arrive a half-century down the line, the “Y2K crisis” would have been a great concern in 1960. In the case of Social Security, some anticipatory action may be warranted, but it would be unwise to act hastily when so much is at stake and when we have so many years to make sure we get the solution right.

Defining the problem as a "crisis" also suggests that the program's financial outlook is getting steadily worse. Yet just the opposite is true. Social Security's long term financing problem is much less immediate and threatening now than in the recent past, even though no changes have been made to the program. In 1997, Social Security's trustees had projected that the program's trust funds would last only another thirty-two years and would be depleted in 2029. Those forecasts have improved steadily—largely because of stronger than expected economic growth—so that the trust funds now are expected to remain sufficient for thirty-seven more years. In fact, Social Security is stronger today than it has been at any time in its history, and its long term financial picture is far healthier than other areas of the federal budget.

(Adapted from Ten Myths about Social Security.)