Social Security has a big financial problem that could slash more than one-fifth of Americans’ retirement benefits if lawmakers don’t come up with a solution in the coming years. Social Security’s primary trust fund is now expected to be depleted in 2032, one year earlier than last year’s estimate, according to the latest forecast from the program’s trustees.What does this mean for your benefits?”If we reach 2032 and no action is taken on the program, every household will receive a 22% cut in their benefits, which could translate to more than $10,000 a year for the average household,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center.Our Get the Facts Data Team created a tool to break down how the funding shortfall could impact your budget. Just enter your current or projected benefits. Why is this happening? The basic problem is that Social Security is paying out more money than it is taking in through payroll taxes. Much of that comes down to demographics. The population is aging and living longer, putting more strain on the system. Meanwhile, fewer kids are expected to be born, meaning fewer workers will be paying into the program in the future. President Donald Trump’s immigration crackdown could also result in less revenue, according to the trustees’ report. “They have lowered their expectations of how many undocumented people are living in the country and thus how many workers are contributing to the trust fund, but not getting benefits because they’re not eligible, and that means less revenue going into the program,” Akabas said. Various tax cuts in the “One Big Beautiful Bill Act,” which Trump signed into law last year, are also expected to contribute to that trend, including the temporary additional standard deduction for seniors. “The imbalance is getting even greater. So the changes that we’re going to need to make to the program over the medium and long term are even more significant than we thought we would need,” Akabas said. What’s the solution? President Donald Trump has vowed to root out fraud in Social Security. “We have a chance to save Social Security without doing anything to it, by just the number of fraudulent people,” Trump said in a cabinet meeting last month. While fraud is an issue, experts say it’s just a small fraction of the program’s financial problems. The White House didn’t directly respond to questions about other potential policy solutions, but reiterated that the president “will always protect and strengthen Social Security.”Social Security Administration Commissioner Frank Bisignano was also asked about some of those policy options during a hearing on Capitol Hill earlier this month. He said he has not been involved in any discussions about reducing Social Security benefits, raising the retirement age, or restricting eligibility for benefits. A long-term solution will almost certainly involve politically painful decisions, but the problem may very well be punted to the next president, since the go-broke date will arrive after Trump leaves office. However, at least some of the lawmakers elected in this fall’s midterms will play a role in shaping the path forward. The Republican Study Committee previously proposed gradually raising the retirement age, while protecting those currently in or nearing retirement. House Speaker Mike Johnson suggested in a recent interview that Republicans would release a plan next year to address runaway spending. He noted that programs, like Medicare, Medicaid, and Social Security, would need to be “adjusted and fixed,” but didn’t offer specifics. Some Democrats have called for raising Social Security’s payroll tax cap to bring in more revenue from wealthier Americans.Other lawmakers are calling for a bipartisan commission to come up with a solution that’s only becoming more urgent. “This is an avalanche coming at us. It’s really hard to fix, it’s really expensive to fix, and every day we wait, we make it worse,” said Rep. David Schweikert, R-Arizona.
Social Security has a big financial problem that could slash more than one-fifth of Americans’ retirement benefits if lawmakers don’t come up with a solution in the coming years.
Social Security’s primary trust fund is now expected to be depleted in 2032, one year earlier than last year’s estimate, according to the latest forecast from the program’s trustees.
What does this mean for your benefits?
“If we reach 2032 and no action is taken on the program, every household will receive a 22% cut in their benefits, which could translate to more than $10,000 a year for the average household,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center.
Our Get the Facts Data Team created a tool to break down how the funding shortfall could impact your budget. Just enter your current or projected benefits.
Why is this happening?
The basic problem is that Social Security is paying out more money than it is taking in through payroll taxes.
Much of that comes down to demographics. The population is aging and living longer, putting more strain on the system. Meanwhile, fewer kids are expected to be born, meaning fewer workers will be paying into the program in the future.
President Donald Trump’s immigration crackdown could also result in less revenue, according to the trustees’ report.
“They have lowered their expectations of how many undocumented people are living in the country and thus how many workers are contributing to the trust fund, but not getting benefits because they’re not eligible, and that means less revenue going into the program,” Akabas said.
Various tax cuts in the “One Big Beautiful Bill Act,” which Trump signed into law last year, are also expected to contribute to that trend, including the temporary additional standard deduction for seniors.
“The imbalance is getting even greater. So the changes that we’re going to need to make to the program over the medium and long term are even more significant than we thought we would need,” Akabas said.
What’s the solution?
President Donald Trump has vowed to root out fraud in Social Security.
“We have a chance to save Social Security without doing anything to it, by just the number of fraudulent people,” Trump said in a cabinet meeting last month.
While fraud is an issue, experts say it’s just a small fraction of the program’s financial problems.
The White House didn’t directly respond to questions about other potential policy solutions, but reiterated that the president “will always protect and strengthen Social Security.”
Social Security Administration Commissioner Frank Bisignano was also asked about some of those policy options during a hearing on Capitol Hill earlier this month. He said he has
not been involved in any discussions about reducing Social Security benefits, raising the retirement age, or restricting eligibility for benefits.
A long-term solution will almost certainly involve politically painful decisions, but the problem may very well be punted to the next president, since the go-broke date will arrive after Trump leaves office.
However, at least some of the lawmakers elected in this fall’s midterms will play a role in shaping the path forward.
The Republican Study Committee previously proposed gradually raising the retirement age, while protecting those currently in or nearing retirement.
House Speaker Mike Johnson suggested in a recent interview that Republicans would release a plan next year to address runaway spending. He noted that programs, like Medicare, Medicaid, and Social Security, would need to be “adjusted and fixed,” but didn’t offer specifics.
Some Democrats have called for raising Social Security’s payroll tax cap to bring in more revenue from wealthier Americans.
Other lawmakers are calling for a bipartisan commission to come up with a solution that’s only becoming more urgent.
“This is an avalanche coming at us. It’s really hard to fix, it’s really expensive to fix, and every day we wait, we make it worse,” said Rep. David Schweikert, R-Arizona.
