Retirees planning to begin claiming Social Security benefits in 2033 could face a staggering cut in annual payments unless Congress intervenes. Individual retirees may lose up to $13,000 per year, and couples with dual incomes could see reductions as high as $18,000 annually, experts warn.
According to the nonpartisan Committee for a Responsible Federal Budget (CRFB), the Social Security trust funds, the Old‑Age and Survivors Insurance (OASI) and Disability Insurance (DI) reserves, are projected to become insolvent by 2034. Once depleted, payouts must be limited to incoming payroll tax revenues by law, triggering automatic benefit cuts.
CRFB’s analysis, which incorporates the effects of the newly enacted One Big Beautiful Bill Act (OBBBA), estimates that retirees in 2033 could face benefit reductions of approximately 24%, or $13,600 for single individuals and about $18,100 for dual-income couples.
The scenario for those retiring in 2033 mirrors CRFB’s focus. They stress that if Congress fails to act within the next seven years, such retirees will experience thousands in lost annual benefits, roughly $13,000 for individuals and about $18,000 for couples.
A large driver of this accelerated insolvency is the tax policy embedded in OBBBA. It includes sizeable tax rate cuts and a higher senior standard deduction. While these changes provide immediate relief, up to 90% of Social Security recipients may no longer owe federal income tax on their benefits, and they also reduce revenue flowing into the trust funds, effectively shrinking the cushion that supports benefits.
CRFB estimates these provisions reduce taxable benefits revenue by roughly $30 billion annually, advancing insolvency from 2033 to late 2032, meaning more retirees would feel the impact sooner. In its report, CRFB notes, “The tax rate cuts and increase in the senior standard deduction from the recently enacted OBBBA would reduce Social Security’s revenue from the income taxation of benefits, increasing the required cut by about a percentage point upon insolvency.”
Trump’s Treasury Secretary says the Trump Accounts created by the budget bill are a “backdoor for privatizing Social Security” pic.twitter.com/1jpKHUtP85
— FactPost (@factpostnews) July 30, 2025
To put this into perspective, retirees in 2033 might begin drawing benefits at the same time that the trust funds hit insolvency. Without action, payouts would shrink to match payroll tax revenue, leaving projected cuts of around 21–24% nationally, particularly hitting those with modest to middle incomes.
Beyond retirement thresholds, those retiring early or later could feel varied impacts depending on how long the insolvency remains unaddressed. As CRFB warns, “Policymakers pledging not to touch Social Security are implicitly endorsing these deep benefit cuts for 62 million retirees in 2032 and beyond.”
Historically, Congress last averted catastrophe in the early 1980s by raising payroll taxes, increasing the full retirement age, and taxing benefits for higher earners. Today’s challenge is similar, but compounded by lawmakers’ reluctance to touch tax cuts targeting seniors while also preserving long-term solvency.
No tax on tips & Social Security sounds good for workers, but SS runs out by 2033 & we’re $34T in debt.
$300B in tariffs should cut deficits, not fund rebates.
Real reform means tough choices on SS, Medicare, Medicaid, debt & defense. #Economy #Taxes #Debt pic.twitter.com/FuLgcigww5
— Mark Tepper (@MarkTepperSWP) July 30, 2025
So what’s next? Several proposals are on the table. One bipartisan plan from Senators Bill Cassidy and Tim Kaine calls for a $1.5 trillion Social Security investment fund. Other proposals seek to tax investment income above $400,000 or gradually increase payroll taxes or the retirement age.
If enacted promptly, such measures could stabilize Social Security and avoid the looming benefit slashes. But without them, millions of retirees, and particularly those retiring in 2033, stand to lose thousands annually in guaranteed income.
