Social Security turns 90 today – but its retirement program is on course to be insolvent by age 97 – according to new estimates from the program’s Chief Actuary. Even if combined with the disability trust fund, Social Security will deplete its reserves before it turns 100.
In this piece, we show:
- Social Security’s retirement trust fund will be insolvent in just seven years – by late 2032 – at which point benefits will be cut automatically by 24 percent across the board if nothing is done to prevent it.
- A typical couple retiring just after insolvency will face an $18,400 cut in annual benefits.
- Recent legislation – particularly the One Big Beautiful Bill Act but also the Social Security Fairness Act – has accelerated insolvency alonside well-known demographic challenges.
- Trust fund solutions are needed soon to prevent insolvency and the statutorily required benefit cut.
Social Security is Seven Years from Insolvency
Social Security is the nation’s largest federal program and largest retirement program. It helps to support 68 million seniors, dependents, survivors, and disabled workers and insures an additional 183 million workers against the risks of aging, disability, and death of a spouse or parent.
Unfortunately, Social Security is in financial trouble. According to new estimates from the program’s Chief Actuary, Social Security’s retirement trust fund is just seven years from insolvency. That’s when today’s 60-year-olds reach their normal retirement age and when today’s youngest retirees turn 69. The insolvency date was accelerated by the reconciliation law’s effect on taxation of benefits, moving from early 2033 as projected in the June 2025 Trustees’ report to late 2032.
On a theoretically combined basis, Social Security’s retirement and disability trust funds are projected to run out just two years later in 2034. That’s just nine years from today, when today’s 58-year-olds reach the normal retirement age and today’s youngest retirees turn 71.
Beneficiaries Face a Deep Cut Without Congressional Action
Under the law, the Social Security program cannot pay out more in benefits than it has collected in revenue (plus accrued interest). As a result, all current and new retired beneficiaries, regardless of age or income, will face an across-the-board 24 percent benefit cut when the retirement trust fund is depleted in 2032.
Based on the latest Chief Actuary projections, we estimate a typical couple retiring shortly after the trust fund runs out will face an $18,400 benefit cut.
Depending on a couple’s age, marital status, and work history, the actual size of the benefit cut would vary. For example, a typical single-earner couple would face a $13,800 cut, while a dual-earner low-income couple would face an $11,200 annual cut. High-income couples could see a cut closer to $24,400. While the absolute size of the cut would be smaller for a low-income beneficiaries than high-income beneficiaries, it would represent a larger share of their income and their past earnings.
Recent Legislation Accelerated Insolvency
Social Security has been on a path toward insolvency for some time – but over the past year, politicians have made its financial condition even worse.
By reducing income tax rates paid by seniors, the recently-enacted reconciliation law – the One Big Beautiful Bill Act (OBBBA) – reduced revenue flowing into the Social Security trust fund from the income taxation of benefits.
In June, we estimated this would accelerate insolvency of the retirement program from 2033 to 2032. Social Security’s Chief Actuary recently confirmed this finding and also estimated the theoretically combined trust funds will be insolvent roughly half a year earlier – in early 2034 instead of late 2034. The Chief Actuary estimates that OBBBA will cost the trust funds$169 billion over ten years and widen its 75-year imbalance by 0.16 percent of payroll.
Meanwhile, the passage of the bipartisan Social Security Fairness Act in January – a law which effectively allows some state and local government workers to “double dip” into Social Security benefits – increased the shortfall by another $200 billion over ten years and 0.14 percent of taxable payroll over 75 years.
As a result of these laws combined with various economic, demographic, and technical revisions, and – most significantly – years of neglect from policymakers unwilling to rescue Social Security, the program’s 75-year shortfall has grown to almost 4 percent of taxable payroll. That’s up from 3.5 percent of payroll in 2024, 2.8 percent in 2019, and 1.9 percent back in 2010. Relative to the economy, the 75-year shortfall has grown from 0.6 percent of Gross Domestic Product (GDP) in 2010 to 1.4 percent today.
Social Security Needs Trust Fund Solutions Now
Social Security is 90 years old, but it hasn’t had a comprehensive checkup since it was 52 (in 1983) – and it is showing its age. To ensure the program survives another 90 years, lawmakers should pursue trust fund solutions to restore solvency and make other improvements. In the coming months, the Committee for a Responsible Federal Budget will begin releasing novel solutions that could help address the program’s challenges.
But the most important solution is political will. Politicians need to be honest with the public on the challenges the program faces and what it will take to ensure the program can pay full benefits past the age of 100. Time is running out.