Social Security Trust Fund is expected to dry out within 10 years
The main trust funds used to pay Social Security benefits are projected to run out by 2033 if lawmakers do not make changes to the system.
Straight Arrow News
According to a new analysis by the Responsible Federal Budget Commission, double-earning couples who retire at the start of 2033 can expect an average annual Social Security benefit benefit of $18,100 compared to their current retirement.
The 24% drop is expected to come shortly after Social Security’s Old Age and Survivors Insurance (OASI) Trust Fund has dried up. Oasi holds money raised from payroll taxes to fund Social Security. The fund is expected to run out by the second half of 2032 as the number of retired people exceeds the number of workers.
Once Oasi is exhausted, Social Security benefits will no longer be paid in full. Instead, benefits are reduced and are paid only by the amount that comes in.
Worse, “reductions will grow over time as scheduled profits continue to outperform dedicated revenues,” the nonprofit CRFB said in its analysis. By 2099, the size of the required benefits reductions will be well over 30%.
Here’s how the cut affects Americans
The $18,100 annual cut is the average for two-income couples. The actual size of profit reductions will vary depending on the couple’s age, marriage status, and work history.
The CRFB stated:
- A typical single couple faces a cut of $13,600, while a dual-eared low-income couple faces a cut of $11,000 a year.
- The high-income couple could see a cut of nearly $24,000.
- The absolute size of the cut is smaller for typical low-income couples than for high-income couples, but represents a large portion of their income and past income.
How many Americans could be affected?
Nearly 67 million Americans received Social Security in June, according to the Social Security Agency.
Social security is considered important by 96% of Americans in 2025, with little difference between age groups and political party affiliations. AARP survey of 3,599 adults over 18, photographed last month shows. AARP is a nonprofit organization that advocates for older Americans.
Nearly two of the three retired Americans say they are essentially dependent on Social Security, but another 21% are somewhat dependent on that, Aarp said.
CRFB vs Social Security and Medicare Councillor
The CRFB estimate of 24% over seven years is more disastrous than the 23% decline over eight years provided by the Social Security and Medicare Councilors report in June. That explains the impact of one big beautiful bill law (OBBA), which the CRFB signed into law on July 4th, so the think tank said.
“The reduction in tax rates and the recently enacted increase in the advanced standard deduction from the OBBBA will reduce Social Security revenues from benefits income taxation and approximately increase the required reductions when insolvency,” the CRFB said. “If the expanded Senior Standard Deduction and other temporary measures of the OBBBA become permanent, benefits reductions will be significant.”
The OBBBA’s $6,000 additional senior deduction is scheduled for 2025-2028.
What can the government do to flow 100% profit?
Congress should increase revenues entering the program by potentially raising payroll taxes. Perhaps you should reduce your overall benefits spending by increasing your retirement age or combination of the two.
Also, eliminating the largest income taxable against payroll tax and reducing profits paid on higher revenues is among the measures Congress can take to save money, the CRFB said.
Medora Lee is a money, market and personal finance reporter for USA Today. mjlee@usatoday.com and Subscribe to our free daily money newsletter Personal finance tips and business news every Monday to Friday.
