Social Security benefits face reduction a year earlier than expected due to pandemic

Social Security and Medicare, the government's two biggest benefit programs, remain under intense financial pressure with the retirement of millions of baby boomers and a devastating pandemic. Social Security will be unable to pay full benefits starting in 2034, a year earlier than previously forecast, due to impact of the crisis.

That's according to a new report from the programs' trustees released Tuesday, which moved up, by one year, the date for the depletion of Social Security's reserves. Medicare is still expected to exhaust its reserves in 2026, the same date as estimated last year. The pandemic's hit to the economy — when unemployment rocketed to almost 15% — has rippled through the nation, prompting some older workers to take early retirement, while millions of women with children have left the workforce due to remote school or lack of daycare. At the same time, fewer adults are opting to have children, depressing the birth rate. A shrinking workforce may also pose trouble in the longer-term for the Social Security program, since it relies on a payroll tax to finance benefits.