The Social Security program faces a financing shortfall that, if left unaddressed, would slash millions of retirees’ crucial monthly benefit payments in just eight years.
The deteriorating financial outlook for the retirement program, which supports roughly 61 million Americans, was released in its annual trustees report Wednesday. It is now expected to run out of money nine months earlier than previously projected, which means benefits could be reduced by 23% if Congress does not act to bolster the program.
That puts the Social Security Old-Age and Survivors Insurance Trust Fund, which pays retiree and survivor benefits, on schedule to be depleted in 2033, or when today’s 59-year-olds turn 67. At that time, the program will have enough revenue coming in to pay only 77% of total scheduled benefits.
The most recent setback was driven largely by a policy change, known as the Social Security Fairness Act, which took effect in January and increased benefits for about 2.8 million government and public sector workers. But there were other factors: Government actuaries now assume that the birthrate will remain lower for longer, while projecting that workers’ compensation would weaken over time as they capture a lower share of the nation’s economic output.
A separate trust fund, which finances Social Security disability benefits for an additional 8.2 million people, is on more stable ground. It will be able to pay all of its bills through 2099, the report said.
The trustees also reported a slightly weaker financial outlook for the trust fund that finances hospital care for Medicare beneficiaries. They expect that that trust fund will be unable to pay all its bills in 2033, three years sooner than it had estimated last year. That change was driven mostly by increased spending on hospital care in 2024, a shift the trustees believe will continue into the next few years.
In their report, the trustees urged lawmakers to address the shortfalls in a timely way so that any changes could be phased in gradually, giving workers and beneficiaries time to adjust.
Trump has vowed to protect Social Security benefits, but he hasn’t introduced any proposals to shore up its financing.
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