Social Security Trustees Report: Retirement Fund Could Run Dry by Late 2032

<p>The Social Security Administration's 2026 Trustees Report projects that the Old-Age and Survivors Insurance trust fund will run out of reserves in the fourth quarter of 2032. That is one quarter earlier than the projection in the 2025 report. Once the fund is depleted, incoming payroll tax revenue would cover only 78 percent of scheduled benefits.</p>

<p>If the OASI fund and the Disability Insurance fund were legally combined, the combined reserves would be exhausted in the third quarter of 2034, at which point 83 percent of benefits would be payable. The DI fund on its own is projected to remain solvent through at least 2100.</p>

<p>The accelerated depletion date is partly attributed to the One Big Beautiful Bill Act, passed in July 2025. That legislation made permanent certain lower income tax rates and increased the standard deduction, which reduced the revenue flowing into the trust funds from the income taxation of Social Security benefits.</p>

<p>Demographic shifts also play a role. The projected total fertility rate has been revised down from 1.90 to 1.75 children per woman. Lower estimates for net immigration have also reduced the projected number of future workers paying payroll taxes.</p>

<p>Analysts estimate that the average monthly benefit cut could be approximately $500 if Congress does not act before the fund is depleted. AARP and other advocacy groups have urged lawmakers to address the shortfall sooner rather than later, noting that earlier action allows for a broader range of solutions and a more gradual phase-in of any changes.</p>

<p>Proposed fixes include raising the payroll tax rate, eliminating the income cap on payroll taxes, adjusting the full retirement age, or reducing benefits for high-income earners. No legislation has been passed as of June 2026.</p>