Social Security could face benefit cuts within six years. Here’s what beneficiaries stand to lose

Social Security retirement benefits could be subject to an automatic, across-the-board reduction in just six years.

Unless Congress acts before then, the retirement trust fund, officially called the Old-Age and Survivors Insurance Trust Fund and used to pay benefits to eligible workers and qualifying family members, is projected to be depleted in the fourth quarter of 2032, according to the program's trustees in a June report.

At that point, the trustees estimate retirement benefits would be reduced by 22%.

The Congressional Budget Office has issued an even grimmer outlook, saying the retirement trust fund could be exhausted earlier, in mid-2032, and that beneficiaries could face a 26% cut when insolvency hits.

Based on a 24% reduction, beneficiaries nationwide could see an average monthly cut of $500, according to a June report from the Committee for a Responsible Federal Budget. In 29 states, retirees would face even larger average losses, the nonpartisan group said.

Senators elected in the upcoming election will still be in office when the retirement trust fund reaches its projected depletion date. Their ability to help avert the crisis will matter for retirees and the broader economy, though the political environment in Washington makes that uncertain.

“The attention on 2032 is appropriate in the sense that that is when beneficiaries and future beneficiaries will see and feel the consequences of inaction,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center, a think tank that promotes bipartisan cooperation.

“Nothing gets Congress to move like that type of deadline,” he said.

Still, partisan standoffs and political gridlock could slow any solution. Lawmakers may simply postpone action instead of making the tax or benefit changes needed to strengthen Social Security.

If Congress chose to merge Social Security's retirement and disability trust funds, the depletion date could shift to the third quarter of 2034, with benefits then cut by 17%, according to the trustees.

Akabas said any delay would deepen the program's financing gap.

There could also be wider economic fallout, he said.

In 2023, Social Security benefits produced $2.6 trillion in total economic output and supported more than 12 million jobs, according to 2025 research from the National Institute on Retirement Security, a Washington, D.C.-based nonprofit and nonpartisan organization.

A 19% benefit cut could shave hundreds of billions of dollars from gross domestic product, the NIRS research found.

Failure to advance Social Security reform could also strain the bond market, according to research released in June by George Mason University's Mercatus Center.

That connection exists because Social Security trust funds are invested in special-issue U.S. Treasury bonds.

If reform is delayed, Treasury yields could come under upward pressure as investors demand higher returns on long-term bonds.

According to the Mercatus Center research, postponed reform could lead to higher interest rates and borrowing costs, or inflation-related adjustments that reduce the value of government liabilities. Those shifts could filter down to household budgets through more expensive mortgages, auto loans, student loans and other consumer credit.

If rates and prices rise, economic growth would be hindered, Akabas said.

“Those effects are also ones that the American people feel, in addition to adjustments to their benefits,” Akabas said.

As the election approaches, some Democratic congressional candidates have said they would raise or eliminate the Social Security payroll tax cap so higher earners pay more into the system. In 2026, the 6.2% tax paid by both workers and employers applies only to earnings up to $184,500.

But it remains unclear whether Washington leaders will have the political will to address the problem soon. Tax increases may be especially unpopular heading into the 2028 presidential election.

As a result, payroll taxes are “extraordinarily unlikely” to rise in the next couple of years, said Jessica Riedl, a fellow at the Urban-Brookings Tax Policy Center, which provides independent tax analysis. If such increases happen at all, she said, they would likely come closer to 2032.

“In Washington, they love to wait until the last minute,” Riedl said. “There's no interest on either side for these sorts of tax increases in the short term. In the long term, I think everything is on the table.”

The National Committee to Preserve Social Security and Medicare, founded by President Franklin Delano Roosevelt's son, former Congressman James Roosevelt, evaluates incumbent lawmakers on how their votes have supported those programs.

The advocacy group has also backed candidates who support higher payroll taxes and oppose benefit cuts. According to Dan Adcock, the organization's director of government relations and policy, it gives endorsed candidates a pair of boxing gloves as a symbol of the battles they will face in Congress.

The group is also telling voters that senators elected this year will be among those responsible for dealing with Social Security, he said.

“We've been trying to impress upon voters why this is an issue that should be top tier,” Adcock said. “They need to be asking candidates about what their plans for the program would be.”