Social Security’s reserves could run out in 2032 —a year earlier than projected last year, trustees say, according to a new report.
At that point, if no adjustments are made, the entitlement program’s Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay out roughly 80% of benefits to seniors, according to the 2026 Social Security and Medicare Trustees’ annual report released today.
The 2026 trustees report shows a “weakening Social Security, bringing the projected shortfall closer,” Nancy Altman, president of Social Security Works, told Yahoo Finance.
The looming concern is not seniors missing payments, but rather the sharply reduced checks that the pending shortfall would trigger with benefit cuts unless Congress acts.
More than 6 in 10 older Americans already say the average Social Security payment of $2,000 a month is not enough to make ends meet today as rising daily living costs take a toll, per a recent AARP report.
“Congress has only two options to address the projected shortfall: Bring more money into Social Security, or cut benefits,” Altman said.
Lawmakers have floated a range of fixes, including raising payroll taxes, increasing the retirement age for younger workers, and lifting the cap on earnings subject to Social Security taxes, currently $184,500 in 2026.
An unorthodox proposal by Louisiana Senator Bill Cassidy (R) and Virginia Senator Tim Kaine (D) — to have the Social Security administration borrow heavily and invest the leveraged funds in the stock market.
Social Security currently provides monthly benefits to around 71 million Americans and provides the majority of income for 43% of seniors, according to the AARP.
“Today’s Trustees reports are a reminder that the fiscal ground is shifting beneath our feet,” Margaret Spellings, president and CEO of the Bipartisan Policy Center, said in a statement. “What feels like mild rumbles now will become a disastrous earthquake far too soon if policymakers continue to delay.”
FILE – A Social Security card is displayed on Oct. 12, 2021, in Tigard, Ore. (AP Photo/Jenny Kane, File) · AP Photo/Jenny Kane
“These insolvency dates may feel abstract and far away, but the reality is that the senators elected in 2026 will be in office when Social Security reaches insolvency. The question is no longer whether these challenges demand attention.”
A sliver of good news: If the OASI were combined with the fund that pays out disability benefits — the Disability Insurance Trust Fund — the reserve fund would not go broke until the third quarter of 2034, on par with last year, and it would shell out 83% of scheduled benefits.
