- Social Security faces insolvency by 2032, forcing policymakers to weigh politically fraught options. Commissioner Frank Bisignano said “everything’s being considered,” as America’s retiree population surges. While the demographic shift threatens long-term economic sustainability, the wave of retirements is temporarily helping hold unemployment near 4.3% despite weak job growth.
Like many developed nations, the U.S. is wrangling with a complex question: How to pay for the care and support of an aging population. Many of the answers to that question won’t be popular, but governments are aware of the need to address the issue before crisis hits.
In America, that timeline is set to seven years. The Committee for a Responsible Federal Budget estimates that Social Security’s retirement trust funds will be insolvent by the end of 2032.
As such Trump’s Social Security Administration Commissioner, Frank Bisignano, needs to workout the landscape for the next generation of retirees.
When asked if plans to redress the issue may include raising the retirement age, Bisignano told Fox Business yesterday: “I think everything’s being considered, will be considered.”
He added: “Remember, most people told you and I Social Security wasn’t going to be around, and it’s going to be around. And so the generations that are coming in will probably have a different set of rules than we had.”
The number of people wrangling with the new reality of retirement is staggering. The Congressional Budget Office (CBO) estimates the Social Security area population (the relevant demographic for estimating payroll taxes and benefits as individuals reach retirement age) will increase from 342 million people in 2024 to 383 million people by 2054.
And this equilibrium of individuals supported by state benefits versus workers to pay into the system to support them is not a use which the CBO believes will be rebalanced anytime soon. In its estimation due to low fertility rates, all population growth from 2040 onwards will be as a result of immigration.
Bisignano added to Fox that raising the retirement age—currently some benefits can be taken from the age of 62 with the full retirement age varying between 66 and 67—isn’t the only option on the table, saying there is “a whole host of items out there than can be hugely beneficial to get to the answer.”
However, later that day the commissioner updated his response, writing on social media platform X that the retirement age is in fact not under consideration. He wrote: “Let me be clear: President Trump and I will always protect, and never cut, Social Security. That’s why we have made many vital reforms, such as cutting waste, fraud, and abuse from the program, to ensure the solvency of Social Security for future generations of Americans. Raising the retirement age is not under consideration.”
Another consideration is the earnings cap at which benefits are phased out. While Bisignano said this figure—currently $175,000—will continue to go up, he added: “It’s another thing to put in the equation to think about.”
“President Trump will always protect and strengthen Social Security,” Liz Huston, a White House spokeswoman, told Fortune.
Retirement rates keeping employment steady
An unexpected upside to America’s aging population is that a shrinking workforce is, in the short-term, helping keep the nation’s unemployment rate in check.
Despite adding a meagre 22,000 jobs last month—and seeing significant downwards revision to labor market data—the U.S. has maintained an employment rate of around 4.3% over the past few months.
While the margins which could tip the rate up or down are minimal, one factor helping maintain the equilibrium is the increased amount of people who are retiring and as such, are not searching for roles.
As David Doyle, Macquarie’s head of economics, told Fortune a couple of weeks ago: “There’s been a surge in retirements this year. The first baby boomers that were born in 1946, they’re now turning 80, and you cascade down from that—I believe the last baby boomer year was 1964—so even the youngest baby boomers are into their sixties now.
“You now have this huge generation that is gonna be [a] drag on labor force growth.”
Of course, that drag is also helping keep unemployment rates down for the time being because the supply of labor does not outweigh even the most meagre of demand.
