Why is the Social Security Trust Fund projected to face shortfalls?

The projection of shortfalls in the Social Security Trust Fund is primarily linked to the demographic changes in the population, specifically the aging population and lower birth rates. As the baby boomer generation reaches retirement age, there is a significant increase in the number of beneficiaries drawing Social Security benefits. At the same time, lower birth rates mean fewer workers are entering the workforce to pay into the Social Security system through payroll taxes.

With a declining ratio of workers to retirees, the fund experiences financial strain because there are fewer contributors supporting the increasing number of beneficiaries. This imbalance creates challenges in sustaining the current benefit levels, leading to the projections of shortfalls.

The other choices do not directly address the core issue. Increased investments in the fund do not relate to the demographic challenges that are causing the shortfalls. A surplus of workers contributing would typically lead to a healthier fund, and higher retirement ages, while potentially alleviating some pressure, do not fundamentally change the ratio of retirees to workers in the long term.