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Studies suggest Social Security in worse shape than we thought

We've known for years that Social Security programs are headed for trouble. Few are likely to have missed the word that the Social Security Disability Insurance trust fund is projected to be out of reserves by sometime late next year unless Congress takes action. Now it seems, though, that things are even worse than had been thought.

According to two studies out of Harvard University, the Social Security Administration's own numbers might be underestimating the problem by billions of dollars due to a certain level of bias in evidence since the year 2000. As a result, researchers say the real state of the Old-Age and Survivors Trust and the Disability Insurance Trust (OASDI), the two funds that feed benefits out to retirees and those on disability, can't be known for certain.

The biggest issue apparently is that the number crunchers at SSA who are responsible for generating the forecasts every year don't share the data they use to make their projections with anyone else, either inside or outside government.

The researchers' conclusions are the result of a review of SSA estimates to see how accurate projections were for five or 10 years out. What they found was that the forecasts were as good as might be possible up until 2000. Then they began to skew toward rosier outlooks, apparently because the tools SSA actuaries used didn't change with the facts of the times.

Study authors noted two specific issues. One was an apparent failure to adjust for increasing demand on the retirement trust from the growing number of baby boomers. Another appears to be that no adjustment was made for the fact that people drawing on the OASDI accounts are living longer than ever before.

The researchers say the SSA could improve the forecasts by better sharing data with others outside of the agency and by automating the process so that human biases are kept to a minimum.

Meanwhile, there are individuals entitled to benefits who need help now as they are facing the challenges of the application and appeals processes. Meeting those challenges can be easier by working with experienced legal counsel.

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Melissa A. Proudian, Attorney at Law
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Fresno, CA 93711

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