Social Security benefits could face cuts in 2032: What to know

The Old-Age and Survivors Insurance Trust Fund, which supports retirement benefits for eligible retired workers and survivor benefits for certain family members, is expected to exhaust its reserves in 2032.

Millions of Americans could see changes to their Social Security benefits in the coming years if lawmakers do not address a projected funding gap.

According to the latest annual Social Security and Medicare Trustees Reports, the Old-Age and Survivors Insurance Trust Fund is projected to run out of reserves in 2032. That fund pays retirement benefits to eligible retired workers and survivor benefits to eligible family members of deceased workers.

What would that mean?

The report says the fund should be able to pay 100% of scheduled benefits through the fourth quarter of 2032, which is one quarter earlier than last year’s estimate. The Congressional Budget Office separately projects exhaustion in fiscal year 2032.

If Congress does not act before the reserves are gone, incoming revenue would be enough to pay about 78% of scheduled retirement and survivor benefits.

The Disability Insurance Trust Fund, which pays disability benefits, is in a much stronger position. The report says it has enough funding to cover 100% of scheduled benefits through at least 2100, which is the end of the projection period.

Combined, the retirement and disability trust funds are projected to provide full benefits through the third quarter of 2034. After that, ongoing revenue would cover about 83% of scheduled benefits. By law, the two funds cannot be merged without legislative action.

Trustees said Social Security’s long-range outlook has worsened in part because of lower birth rates, reduced immigration, and changes in federal tax law. They also said provisions of the One Big Beautiful Bill Act are expected to reduce the revenue Social Security receives from taxes on benefits.

It is important to note that the trustees are projecting depletion of the reserves that support retirement and survivor benefits in late 2032, not that Social Security will completely run out of money. The program would still collect revenue, including payroll taxes, but that money would not be enough to pay full scheduled benefits.

Looking further ahead, Social Security faces a widening funding shortfall. The Congressional Budget Office says the gap between benefit payments and revenues is projected to grow over the next 75 years if current laws remain largely unchanged.

Officials said lawmakers have several ways to respond to the long-term shortage.

Possible fixes examined by Social Security officials include changes to payroll taxes, the retirement age, benefit formulas and cost-of-living adjustments. The trustees did not endorse a single solution, but said acting sooner would give lawmakers more room to phase in changes.