The Clock is Counting Down on Social Security Solvency

The Social Security Board of Trustees has released its 2025 annual report, and the news isn’t encouraging for future retirees. The trust funds that keep Social Security running are projected to hit a critical point sooner than previously expected, potentially impacting the benefits millions of Americans rely on.

 

The Key Numbers

 

The Old-Age and Survivors Insurance (OASI) trust fund, the part of Social Security that pays benefits to retired workers, is now projected to run out of money in early 2033.
That’s a slightly earlier date than the 2024 estimate, and when it happens, benefits could be cut by 23%, meaning recipients would receive just 77% of what they’re owed.

If Congress authorizes combining the OASI trust fund with the disability insurance trust fund (known as DI), the system could continue paying full benefits until 2034, one year earlier than last year’s projections suggested. After that, incoming payroll taxes and other revenues would only be enough to cover 81% of scheduled benefits.

 

Why the Outlook Has Worsened

 

Several factors have pushed the insolvency date forward:

1. Policy Changes  – Earlier this year, the Windfall Elimination Provision and Government Pension Offset were eliminated. These policies reduced benefits for certain public pension recipients. Removing them accelerates depletion.
2. Economic Trends  – Fertility rates are growing more slowly than expected, and worker earnings have lagged earlier forecasts.
3. Long-Term Demographics  – Back in 1960, there were more than five workers paying Social Security taxes for each beneficiary. Today that ratio is just about 3 to 1, and it’s projected to fall below 2.5 to 1 by mid-century.
4. Recent Legislation  – The One Big Beautiful Bill Act (OBBBA), signed in July, cuts revenue by reducing the taxation of Social Security benefits. The Committee for a Responsible Federal Budget estimates this could strip about $30 billion per year from the trust funds, pushing insolvency from early 2033 to late 2032.

 

Possible Solutions

 

Policymakers have multiple tools to address the shortfall, but each option comes with trade-offs:

• Increase payroll taxes or raise the income cap subject to Social Security taxes.
• Reduce benefits, potentially by raising the full retirement age.

Acting sooner would make the fix easier. If changes were made today:

• A 29% payroll tax increase (about 3.65 percentage points) could restore 75 years of solvency.
• Cutting benefits by 22% overall or by 27% for new beneficiaries could do the same.

Waiting until 2034 would require even larger changes.

 

What This Means for You

 

With the future of Social Security less certain, some might feel tempted to claim benefits as soon as they can. But rushing to collect often isn’t the best move financially, especially for those who rely on this income long-term.

If lawmakers act soon, there’s still time to stabilize the system, and protect benefits for decades to come.

 

Contact your local representatives today to make your voice heard!

 

The easiest and most effective way is to use 5 Calls: https://5calls.org/