The trust funds backing Social Security face increased pressure, partly due to last year’s One Big Beautiful Bill Act
Social Security’s trust fund is expected to run out of money in 2032, at which point beneficiaries will receive only 78% of promised benefits, the Social Security and Medicare boards of trustees said Tuesday.
Social Security, which provides benefits to more than 70 million retired workers and people with disabilities, faces increased pressure from last year’s One Big Beautiful Bill Act tax law, reduced immigration and lower fertility rates.
Social Security plays a crucial role in the finances of older adults. Among Americans age 65 and older, 40% rely on Social Security for half or more of their income, while about 14% depend on it for 90% or more of their income, according to AARP.
The looming insolvency comes as older Americans grapple with inflation, a higher cost of living in the wake of the Iran war and increased healthcare expenses.
“The Trustees recommend that lawmakers address the projected trust-fund shortfalls in a timely way to phase in necessary changes gradually and give workers and beneficiaries time to adjust. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits,” the trustees said in a report. “With informed discussion, creative thinking and timely legislative action, Social Security will continue to protect future generations.”
Two trust funds support Social Security benefits: The first is the Old-Age and Survivors Insurance trust fund, which pays out benefits to retirees and dependents; the second is the Disability Insurance trust fund, used for disability benefits.
The Old-Age and Survivors Insurance trust fund is now expected to be depleted in 2032, earlier than last year’s forecast of 2033. Last August, Social Security’s chief actuary, Karen Glenn, said the fund would be depleted in 2032 due in part to the GOP’s One Big Beautiful Bill Act, which included a temporary enhanced tax deduction for seniors.
Reduced immigration and lower fertility also played a role in the more grim forecast, as fewer people will pay into the Social Security program to support the benefits of retired Americans.
The Disability Insurance trust fund’s reserves are projected to remain positive throughout the 75-year projection period.
The two funds are legally separate entities, each with its own actuarial projections and estimated depletion dates. The trustees, however, included in their report an estimate of when the trust funds would be depleted if combined, in order to illustrate the actuarial status of the Social Security program as a whole. The combined trust would be depleted in 2034, at which point only 83% of benefits would be paid.
To be sure, Social Security is not going bankrupt, and the program has never missed a payment in its roughly 90-year history. The average Social Security payment was about $2,081 a month as of April 2026, according to the Social Security Administration.
But in order to prevent an across-the-board cut to benefits, Congress must make changes to shore up the program. The issue of Social Security has been called the “third rail” of politics, due to the charged political ramifications of touching benefits for millions of older Americans.
“This should be a wake-up call — Congress needs to act. Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire. No family should see any cuts to what they’ve earned in Social Security,” said AARP CEO Myechia Minter-Jordan.
Meanwhile, the trustees’ report also looked at Medicare, including the Hospital Insurance trust fund that supports Medicare Part A, which pays for inpatient hospital services. The expected depletion date for the Hospital Insurance trust fund is 2033, at which point only 89% of benefits would be paid.
Medicare is the primary or only source of healthcare for most older Americans. About 68 million individuals are currently enrolled in Medicare, including those age 65 and older and people with disabilities.
“Today’s Trustees reports make clear that we are rapidly running out of time to secure the future of Social Security and Medicare,” said Michael Peterson, CEO of the nonprofit Peter G. Peterson Foundation. “If lawmakers fail to act, all Social Security recipients will face automatic, immediate benefit cuts of 22% in 2032, just six years from now. In seven years, Medicare faces an automatic cut to providers that could lead to disruptions in care or higher costs for patients.
“It’s important to recognize that the senators we elect this year will be in office when Social Security becomes unable to pay out full benefits, so this must be a central campaign issue,” Peterson added.
The last time Congress passed major Social Security reform was in the 1980s, when lawmakers waited until the 11th hour to put through changes that included gradually raising the retirement age for full benefits to 67 for those born in 1960 or later.
“Congress has only two options to address the projected shortfall — bring more money into Social Security, or cut benefits. Any politician who refuses to raise revenue, including by making the wealthy pay their fair share into Social Security, is telling us that they support benefit cuts,” said Nancy Altman, president of advocacy group Social Security Works.
