Apr 11, 2026
Last year, the Committee for a Responsible Federal Budget (CRFB), a centrist business-supported group dedicated to lower deficits, warned that reforms included in President Donald Trump's One Big Beautiful Bill could push Social Security toward insolvency in 2032 instead of 2033(1).
This year, that warning is being echoed by the government's own Congressional Budget Office(2). The Old-Age and Survivors Insurance (OASI) Trust Fund, according to the agency's report, could be exhausted in just six years.
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That's a concerning prospect not just for the roughly 67 million current beneficiaries, but also for millions of workers and soon-to-be retirees.
If you're one of these concerned workers or retirees, here's what you need to know.
The full picture
The Social Security trust fund's potential insolvency has been on the radar for years. Trustees' reports have been warning about this fiscal deadline since at least 2012(3).
Over the past year, political decisions, including tax cuts for certain groups, have further strained the trust fund's financial situation and worsened its revenue shortfall, according to the CRFB report.
Meanwhile, aging demographics are expected to push the fund's expenses higher over the long term. By 2030, the number of people over the age of 65 will, for the first time in U.S. history, outnumber those under age 18, according to the Peter G. Peterson Foundation(4).
With higher expenses and lower revenue, it's no surprise that the trust fund is expected to be depleted sooner rather than later.
However, that doesn't mean the government can no longer afford benefit payments. When the trust fund runs out, the system defaults to a "pay-as-you-go" model, where payroll tax revenue directly funds benefits each year.
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This shift means beneficiaries can still expect their payments, but likely at a reduced rate. According to CFRB estimates, monthly benefits could be cut by about 24% on average, or roughly $18,400 annually for a typical retired couple. The cut could be either larger or smaller depending on your age, marital status, and work history.
For many workers and retirees, this potential cut is concerning. About 59% of non-retired Americans said they were worried about Social Security not being available by the time they stop working, according to a DepositAccounts survey(5).
Fortunately, this fiscal cliff is not inevitable. Policymakers have several options to avoid or delay these cuts.
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What lawmakers can do
The good news is that the Social Security system can be reformed, and has been before.
Congress acted decisively in the 1980s by raising payroll taxes and gradually increasing the retirement age, which stabilized the system before the Baby Boomers started retiring(6). Similar reforms are now being considered to strengthen the program again.
The CFRB, for example, has outlined 10 options for policymakers, ranging from higher taxes to benefit reductions for high-income earners.
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"Increasing the payroll tax rate by one percentage point from 12.4 to 13.4 percent (split equally between the worker and the employer) would close 28 percent of Social Security's solvency gap and 23 percent of its structural gap," the report says(7).
Whether politicians will act on any of these solutions remains uncertain. Meanwhile, workers and retirees should prepare for the worst-case scenario.
What you can do
Although the trust fund's depletion is not guaranteed, it's wise to plan as if it could happen.
Stress-test your retirement budget to see if you could remain comfortable if benefit payments are reduced. Consider finding ways to boost your earnings over the next several years to increase the benefits you qualify for.
You may also need to focus on your own personal savings to fill potential gaps. Consider raising your savings goal, delaying your Social Security claim to increase monthly payments, or working part-time or freelance during retirement to supplement income.
The best-case scenario? Social Security is reformed, your savings perform better than expected, and you enjoy more financial freedom in retirement than you anticipated.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Committee for a Responsible Federal Budget (1)(7) ; Congressional Budget Office (2) ; Social Security Administration (3) ; Peter G. Peterson Foundation (4) ; DepositAccounts (5) ; Yahoo Finance (6)
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
