The OASI Trust Fund And The DI Trust Funds

Superior Essays
Financing
Since 1997, the OASDI program have always placed a requirement for their workers and their employers and self-employed persons to pay taxes on every earning to cover jobs up to the annual taxable maximum. Amounts are automatically adjusted as wages continue to rise. There are two separate trust funds that funds are placed in; the OASI Trust Fund and the DI Trust Fund. All the money that is received by the trust funds is usually used to pay the benefits and operating expenses of the program. If there is expenses or increments not needed they are automatically invested in interest-bearing securities. These interest-bearing securities are guaranteed by the U.S. Government. The income from trusts fund income includes all amounts that
…show more content…
An easy short-term solution will be to adjust the division between the two. However, there are many underlying elements of the problem. Since the full retirement age has increased from 65 to 66 and for those born after 1960 will go to 67, many individuals will probably be classified in a high disability incidence. This extension of the retirement age allows individuals to utilize means for a few additional years of collecting benefits from the DI trust fund rather than the OASI trust fund. Another problem is the despondence from the aging of the baby-boom generation. The “baby boom” has been identified as having any individuals who were born between 1946 and 1964. Those who are classified as “boomers” turned 50 and were thus well into the years of high disability rates between 1996 and 2014. These boomers have caused a great impact on draining DI trust fund. The 2001 recession and especially the 2008 Great Recession also became a problem (Kilgour, …show more content…
Although they may be able to continue to do their current job, if they ever decide to quit working it will become extremely hard for them to find another job. This becomes a problem because not only will it be hard to seek employment, they will not be eligible for OASI retirement benefits yet. Sometimes this requires them to apply for DI benefits that will hopefully, hold them over until retirement benefits do become available. The SSA has been classified as a “safety net” of the United States. For most citizens. It is reported that, “almost everyone is related to or acquainted with one or more of the 8.9 million people who are on disability.” This is what adds reasoning that the OASDI should continue. These are problems that congress will have to address in order to get to the long-term problems long before. If officials wait longer than expected the problems may continue to grow for baby boomers. It is not necessary that the OASDI trust funds run a surplus or become fully funded. It is suggested that HR and compensation and benefits professionals should voice their input to those demanding early action in request to save and revitalize problems among the Social Security Administration. They must be able understand the eligibility, benefits, funding sources to provide employees and their families with a comprehensive and cost-effective benefit structure for future

Related Documents

  • Improved Essays

    This continues to be a problem because the cost of living is increasing, birth rates are declining, and people are living longer (NOLO, n.d.). These factors put a strain on the funds available for the elderly. Unfortunately, the silver tsunami will also affect Medicare negatively. There will be an increase in chronic diseases that are a result of old age as well as dementia. These chronic illnesses, especially dementia, require a large amount of healthcare providers that may not be available in the future (Gill, n.d.).…

    • 1503 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    Claims that “According to the 2009 annual report of the Social Security Board of Trustees, the program faces a budget shortfall of more than $15 trillion over the next 75 years.” (Procon.org, 2015, p.1) Because of this, many predict that the funds for Social Security will be insolvent by 2037. For this program to achieve long-range solvency, the benefit cuts, and tax increases need to be twice as much as needed than ten years…

    • 1327 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    • Discretionary vs. Nondiscretionary Fiscal Policy 685 A discretionary is the changes made by the government. It could be taxes or spending. Changes can be made every year by the president or congress. When changes are made, it’s done to expand the economy.…

    • 770 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Baby Boomers Want to Stay Living at Home The care for aging baby boomers is not where it needs to be for the very large generation that is already starting to retire, and will continue to do so over the next two decades. Including many things that have not grown with the generation in order to accommodate such a large group. Many baby boomers would like to stay living in their own home during retirement, but that may not be possible.…

    • 579 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Dbq Social Security Act

    • 722 Words
    • 3 Pages

    During the Roosevelt administration, there was a very important piece of legislation passed called the Social Security Act of 1935, which was chosen as the topic of this paper. The Social Security Act was enacted to help older Americans with having adequate retirement incomes so that they would not have to depend on welfare. Years after the act was passed, the right to social security was declared as a human right in 1948.The Social Security Act was the first national program of economic protection for Americans, and it included several provisions. Those provisions included “ADC, UIB, Social Security pensions for older Americans, Aid to the Blind, and Old Age Assistance”. In 1939, the coverage was extended to dependents and survivors.…

    • 722 Words
    • 3 Pages
    Improved Essays
  • Great Essays

    Baby Boomer Essay

    • 1483 Words
    • 6 Pages

    Government assistance programs liability may increase from the current status. The federal liability could rise and double from current. Many economists anticipate aging boomers to create chaos in the housing market because a large percentage will remain in his or her home versus selling it. People are concerned that as million of Baby Boomers acknowledge retirement age will hinder America’s workforce. Fear of approaching labor shortage because of Baby Boomers retirement is reality.…

    • 1483 Words
    • 6 Pages
    Great Essays
  • Great Essays

    Description of the problem/issue Long Term Care (LTC) “is a range of services” one may need to support their personal care needs. LTC helps individuals with some of the most basic Activities of Daily Living (ADL’s) like eating, bathing, and dressing. LTC also helps support Instrumental Activities of Daily Living (IADLs) including: housework, medication management, cleaning, and grocery shopping (“What is Long Term Care?”). LTC services in the United States help meet the needs of older adults with functional limitations and other healthcare needs. LTC services is highly regulated by the government and accounts for a significant component of the health care spending in the U.S.…

    • 1856 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    New Deal Dbq

    • 397 Words
    • 2 Pages

    Social Security Act provided funds to the unemployed, the blind, the deaf and, the disabled, as well as pension for the aging…

    • 397 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    10 & 11 - All Possible Questions TRUE/FALSE 1. Per GASB Statement No. 34, permanent funds are classified as fiduciary funds. 2. In accounting for permanent funds only the income can be spent; the principal must be preserved intact. 3.…

    • 1958 Words
    • 8 Pages
    Improved Essays
  • Improved Essays

    After a twenty-year debate on whether Medicare should be enacted, it was finally chosen to be passed to support the people of our nation in a just manner. The implement of Medicare in the lives of the elderly has given them a significant support system for the years to come without the worry of paying for expensive medical procedures. As their bodies begins to wear, they’ll have the ability to be caught by the safety net of…

    • 576 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Baby Boom Sociology

    • 1104 Words
    • 5 Pages

    Those who were born in the United States between 1946 and 1964 are known as baby boomers. The baby boom is defined as having occurred during the peak years of this roller coaster ride: its legacy was a population bulge destined to leave its imprint on each phase of the life cycle (MacUnovich). Baby boomers represent the largest generational birth cohort in United States history, making about 76.5 million in total (MacUnovich). Though there is no definitive answer, some effects that were stated to attribute the birth increase during the baby boom generation, were the antiwar movement, an increase in crime rates, and the development of the women’s movement (Kirszner). The baby boom generation is often characterized as a generation of optimism,…

    • 1104 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Welfare Programs

    • 899 Words
    • 4 Pages

    Funded by general tax revenues instead of social security taxes, the SSI program benefits aged, blind, and disabled individuals who have little to no income. Unlike other programs, SSI pays out cash to provide for the basic needs of food, clothing, and shelter. However, SSI benefits are much greater than other programs provided by the federal government. Furthermore, SSI provides greater work incentives than other programs. As seen from the findings above, SSI is necessary to maintain in the welfare program…

    • 899 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The United States Social Security, the single most depended on welfare program across America, is in danger. Researchers have discovered that the Social Security program, newly named Old Age Survivor Disability Insurance, is deteriorating. Insolvency is deemed the forthcoming issue regarding the downfall of America's largest safety net. By the year 2034, the OASDI trust fund will only be able to pay out 75% of its debt owed to the millions of Americans advancing into their retirement years (Privatizing Social Security). Politicians have addressed the impending insolvency of our nation’s welfare.…

    • 789 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    It is evident based upon the increase and advancement in medicinal technology that the older adults are living longer they are known as the baby boomers. It is good that individuals are living longer but the negative side is that the society at large are not equipped to deal with this trend on the rise. According to the article it stated that “In 2012, the public cost of Medicaid and Medicare was at least S997 billion, according to the Centers for Medicare and Medicaid Services. By 2022, the total public cost of these programs is expected to reach $1.96 trillion.” It shows how unprepared they are for the baby boomers.…

    • 838 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Retirement Age Analysis

    • 1670 Words
    • 7 Pages

    They are the generation anywhere between ages 15 and 65 years old. There are also the beneficiaries, which are the ones receiving the benefits of these programs, usually those in the 65+ age group. In 2008, an article was published in the Independent Review, titled “The Anatomy of Social Security and Medicare”, which…

    • 1670 Words
    • 7 Pages
    Great Essays