Jorgen Vik: Don't panic over Social Security rumors, reports

April showers bring May flowers.

And handwringing about the health of the Social Security retirement program.

This is the time of the year we receive the annual Social Security Trustee Report. It points out that the Social Security trust fund — currently valued at $2.8 trillion, according to the latest report — will run out of funds in 2033.

For decades, the report has estimated between 2033 and 2035. The variation isn't great, but the trustees share that this is due to tweaks to their assumptions in their analysis.

But here is where certain journalists and pundits get overly excited about amassing clicks and views.

Don't fall for articles claiming the system is broke or running out of money.

This is a pay-as-you-go system.

Over the past almost 40 years, the money collected by way of Social Security payroll taxes, taxes on the benefits themselves, and interest on the trust exceeded the money paid out in benefits. This is how we accumulated $2.8 trillion in the Old-Age and Survivors Insurance (OASI) Trust Fund.

The trustees estimate that after the fund runs out, the program will cover 77% of then-current benefits. As the century progresses, they estimate the program's ongoing revenue will cover closer to 75%.

The looming imbalance is a concern I hope will be handled by Congress, and accepted by the rest of us, before 2033.

Solutions typically involve revenue increases and/or benefit reductions. Finding a political compromise appears too difficult so far.

Worst case, which I personally view as very unlikely (as seniors vote), the program recipients would experience a 23% cut to their Social Security payments.

That is not broke.

But it's not good, either.

As you read the dire warnings of Social Security deficits, keep perspective. The trustees are telling us there may be a 23% pay cut in a decade. They are not projecting it'll be all gone.

Good luck.