Social Security trustees report projects retirement fund depletion by late 2032
The latest Social Security Administration trustees report says the retirement trust fund could be exhausted by late 2032, potentially reducing benefits to about 78% of current levels.
The Social Security Administration’s annual trustees report released Tuesday projects that the Old-Age and Survivors Insurance (OASI) trust fund, which pays retirement benefits, may be depleted by late 2032. If the fund runs out as forecast, the program would be able to cover roughly 78% of scheduled retirement benefits.
The report notes that the earlier depletion date follows the enactment of the 2017 tax legislation, which the agency’s chief actuary said would have material effects on trust-fund finances. The combined OASI and Disability Insurance trust funds are still expected to remain solvent through the third quarter of 2034, at which point about 83% of benefits could be paid.
Congress could, in theory, shift money between the two trusts to cover shortfalls, but such a move would divert resources from disability beneficiaries to retirees. Shai Akabas, vice president of economic policy at the Bipartisan Policy Center, described that option as a temporary fix that would only postpone broader legislative action.
The disability trust fund is projected to retain a positive balance for the next 75 years. Experts say Social Security is not facing bankruptcy, but benefit cuts could become significant once the retirement fund is exhausted. Research from the Committee for a Responsible Federal Budget estimates average monthly cuts of about $500, with larger losses in 29 states.
The average monthly retirement benefit for 2026 is projected at $2,071 after a 2.8% cost-of-living adjustment. Social Security currently provides benefits to roughly 71 million Americans, representing the primary income source for about 43% of seniors, according to AARP.
"What's concerning is that we've known about this problem for several decades, and Congress has not done anything to address it," Akabas said.
"This should be a wake-up call: Congress needs to act," AARP CEO Dr. Myechia Minter-Jordan said.
The situation remains under review as policymakers consider options to preserve benefit levels.
