If the government doesn’t come out with a plan, soon, the coffers of social security will be empty. It would result in millions of Americans losing a chunk of their social security benefits.
The way things are going right now, there will be Social Security cuts within the next decade. A new analysis was conducted by the Committee for a Responsible Federal Budget (CRFB). It says that the trust fund of Social Security is projected to be depleted by 2032, which will then lead to automatic benefit reductions beginning in 2033.
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For many retirees, this could mean losing thousands of dollars each year. If there is a dual-earner couple, they could expect to see average cuts of $18,100 annually.
This looming shortfall is imminent because Social Security relies on payroll tax revenue. It alone is not sufficient to cover current benefit levels.
For decades, the gap in the trust fund was funded by the Old-Age and Survivors Insurance (OASI) Trust Fund. However, as Baby Boomers are retiring in large numbers and life expectancy has gone up, outflows are overtaking inflows.
When the reserves run dry in 2032, the system is expected to be operated solely on payroll tax collection.
If there is no solution from Congress, it would trigger a nearly 24% across-the-board cut in benefits for all recipients, and it would begin in 2033.
While all beneficiaries would feel the effects, the dollar impact will vary:
- Dual-earner couples: An average annual loss of $18,100
- Single-earner couples: Around $13,600 less per year
- Low-income couples: About $11,000 in lost benefits
- High-income couples: Cuts could reach $24,000 annually
These reductions will have especially dire consequences for low- and middle-income retirees.
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The Social Security Administration’s Office of the Chief Actuary (OACT) has determined that Trumps Big Ugly Bill will worsen Social Security’s financial outlook.
The US Old-Age and Survivors… pic.twitter.com/cGhe2AKE8C— we the people (#wtpBLUE) (@wtpBLUE) August 19, 2025
These couples rely on Social Security as their primary source of income and do not have any savings for the future.
Experts warn that if there is no solution soon and there is no change, poverty rates among older Americans could double.
Another reason that the timelines have shifted and the money is expected to run out sooner than later is because there have been reduced tax revenues coming into the trust fund. And this is because of legislation.
For example, tax cuts included in last year’s sweeping domestic policy bill lowered payroll contributions. This then increased the depletion rate, pushing the date of the empty trust fund sooner.
Some funds were set aside to support rural hospitals and senior benefits, but these amounts are very small in comparison to the loses’ that are being calculated from the trust fund collapse.
The good news is that solutions exist. But they require political will. Possible reforms include:
- Raising or eliminating the wage cap so that higher earners pay Social Security taxes on more of their income.
- Gradually increasing payroll tax rates to boost revenue.
- Adjusting benefit formulas or retirement age to reduce outflows.
Financial planners are suggesting that individuals should prepare for the possibility of cuts. Delaying Social Security until age 70 can lock in higher monthly payments, while increasing personal savings and diversifying retirement income sources can provide a cushion if benefits shrink.
