Social Security is on track to deplete its trust funds by 2034, one year sooner than previously forecast,
when the federal retirement program will be required to cut monthly benefits by about 20%.
The new projection, issued Wednesday in the Social Security Board of Trustees’ annual report, is partly due to increased costs from the Social Security Fairness Act, which boosted benefits for millions of retirees, the report said. Last year’s report had forecast that the program would need to cut benefits starting in 2035, impacting Social Security’s 70 million beneficiaries.
The Social Security program has been staring down a financial crunch for years, although the trust funds’ depletion date can change from year to year due to fluctuations in the economy and the number of beneficiaries. The trust fund is slated to be depleted partly due to the wave of baby boomer retirements and an aging U.S. population, which means its reserves are drawing down because spending is outpacing income.
“Congress, along with the Social Security Administration and others committed to eliminating waste, fraud and abuse, must work together to protect and strengthen the trust funds for the millions of Americans who rely on it — now and in the future — for a secure retirement or in the event of a disability,” said Frank Bisignano, commissioner of Social Security, in a statement.
Here’s the impact on your benefits
Even if the trust funds are depleted — which may not occur if Congress makes changes to how the program is funded, for instance — benefits won’t suddenly disappear.
Instead, Social Security beneficiaries would see a 19% cut to their benefits, the report said.
The current average Social Security benefit for a retiree stands at $1,976, which means a 19% reduction would take their monthly check down to about $1,600.
The new report is a wake-up call that lawmakers need to move quickly to shore up the program, some advocacy groups for seniors said on Wednesday.
“Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives,” said AARP CEO Myechia Minter-Jordan in an email. “More than 69 million Americans rely on Social Security today and as America’s population ages, the stability of this vital program only becomes more important.”
There are two ways to shore up Social Security, by either raising more revenue or cutting benefits, said Nancy Altman, president of Social Security Works, an advocacy group for the program, in an email. “Any politician who doesn’t support increasing Social Security’s revenue is, by default, supporting benefit cuts,” she said.
One method of raising more revenue for the program would be lift its income cap, which stands at $176,100. Earnings over that amount are exempt from the payroll tax, which funds Social Security.
“In poll after poll, the American people are clear that they strongly support making the wealthy pay their fair share into Social Security, and overwhelmingly oppose benefit cuts,” Altman said.
Changes to Social Security
One of the changes to Social Security this year that will have a “substantial” impact on the program is the Social Security Fairness Act, which went into effect on January 5, the report said.
The Social Security Fairness Act expanded benefits for millions by eliminating two federal policies that barred employees with a public pension from collecting their full benefits under the federal retirement program. Those same policies also reduced benefits for such workers’ surviving spouses and family members.
Under the new law, about 3.2 million recipients are getting higher benefits, ranging from modest increases to more than $1,000 a month in additional money, the agency has said.
Americans are also filing for Social Security benefits at a record rate this year, the program’s data shows. The number of people claiming benefits jumped 17% to 1.8 million in 2025 through May versus the same period a year earlier, putting the program on track to enroll 4 million new beneficiaries in 2025.
The spike in early benefits claims comes as the Trump administration has slashed jobs at the agency and made other changes at the Social Security Administration, which had already been struggling to provide services to retirees, disabled people and survivors of deceased workers who rely on the program.
Anxieties about the stability of the program likely prompted some of the new filings, experts have told CBS MoneyWatch.
Medicare’s outlook
Separately, the Medicare Board of Trustees issued a report Wednesday that said the health insurance program for people over 65 is facing a financial crunch in 2033, at which point it wouldn’t be able to pay 100% of benefits.
Instead, the program’s revenues would only cover 89% of its costs at that point, the report said.
“Medicare provides essential coverage for millions of American seniors, but this year’s report underscores the urgent need for serious, sustained reform to secure its long-term future,” CMS Administrator Dr. Mehmet Oz said in a statement.
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