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Social Security Funds to Run Dry in 8 Years, Prompting 17% Benefits Cut
By Adam Hardy MONEY RESEARCH COLLECTIVE
Using today’s numbers, that means payments could fall from about $1,933 to $1,604 on average.
Social Security’s trust funds are still expected to run out of money by 2034, at which point millions of Americans would see a steep cut in benefits.
If Congress does not act to address the funding shortfall, retirement and disability payments would fall by 17%, according to the latest Social Security Trustees report. The annual report, released Tuesday, provides a glimpse into the financial status of the nation’s two largest safety-net programs, Social Security and Medicare. Last year’s report also estimated the funds would deplete in 2034.
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“This should be a wake-up call: Congress needs to act,” Myechia Minter-Jordan, CEO of AARP, said in a statement. “Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire.”
More than 75 million Americans rely on monthly payments from the Social Security Administration. The benefits have two key components: retirement payments and disability payments, each funded by its own trust. For retirement benefits, funds are expected to run out by 2032. Disability payments are expected to pay out for the next 75 years or so.
Assuming the retirement trust first runs out and dips into the disability trust, the combined Social Security coffers could last until 2034.
Earlier this year, the nonpartisan Congressional Budget Office projected that the retirement benefit fund could run out by 2032. The trustees came to the same conclusion.
Social Security depletion date: What happens after 2034?
If the trust funds were to run dry, Social Security would go insolvent — but it would not go bankrupt. Because Social Security is mostly funded by taxes in real time through payroll deductions, the majority of benefits would still continue to flow.
It’s expected that benefits payments would be reduced by about 17% if the programs went insolvent. On average, Social Security payments could fall from $1,932.80 to $1,604.23, a decline of nearly $330, Money estimates.
However, experts largely expect insolvency to be a worst-case scenario.
AARP says the narrative that Social Security is going bankrupt is spurring a lot of misinformation. “We’re trying to message that Trust Fund insolvency is a solvable issue, but Congress needs to step up to do so,” an AARP spokesperson says in an email.
Even if nothing is done, people will continue to receive the bulk of their benefits, according to Alicia Munnell, founder of the Center for Retirement Research at Boston College.
“No one, however, wants to see an immediate … benefit cut in Social Security retirement benefits,” she wrote in report last May.
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Despite its current financial woes, Social Security remains strongly popular regardless of political affiliation. And there are several options under consideration to ensure solvency for decades to come.
Some popular fixes with bipartisan support include subjecting wages over $400,000 to the payroll tax, gradually increasing the retirement age and reducing benefits for top earners. In recent years, investment firms like BlackRock have backed fringe proposals to open some of the funds to private investments.
A recent economic projection by Munnell found that equities alone are “not the silver bullet for solving Social Security’s financing problems” and could leave the government with a “big pile of debt,” but the strategy could be used in conjunction with some of the other policy reforms to put the program back on sound financial footing.
The silver lining is that lawmakers still have ample time to find the right fix.
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 500 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on several of Money’s marquee rankings, including Best Hospitals, Best Credit Cards, Best Places to Live and others. In 2025, Adam was named a Goldschmidt Data Journalism Fellow by the Society for Advancing Business Editing and Writing (SABEW). As part of the fellowship, he received hands-on training from SABEW, the U.S. Census, U.S. Federal Reserve Bank, Bureau of Labor Statistics and other federal government agencies in Washington, D.C. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in St. Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.