As the U.S. marches toward the 2030s, the financial safety net that supports nearly 67 million Americans is on the verge of a seismic shift.
The latest analysis from the Committee for a Responsible Federal Budget (CRFB) warns that if lawmakers do not intervene, Social Security payments could be slashed by nearly a quarter for all beneficiaries as soon as late 2032.
That looming reduction would mean a dual-earner couple retiring in 2033 could expect to receive roughly $18,100 less per year than they would today, the CRFB says. Even for single-earner and lower-income households, the impact is significant.
Typical single-earner couples could see a cut of $13,600, while dual-earner, low-income couples may lose $11,000 annually. High-income couples stand to lose the most in raw numbers, potentially facing reductions of $24,000 a year.
Millions rely on Social Security and cuts could get worse
Nearly every American is affected by Social Security. A June survey by AARP found that 96% of adults consider the program essential, with almost two in three retired Americans heavily dependent on it for day-to-day expenses.
According to CRFB projections, these cuts will not only impact individuals’ retirement security, but could more than double the poverty rate among America’s seniors.
The reason for these dramatic projections? The Old-Age and Survivors Insurance (OASI) Trust Fund, which collects payroll taxes to pay benefits, is expected to run dry by late 2032.
Once that happens, Social Security would only be able to pay out what it receives in ongoing tax revenue, triggering an automatic 24% reduction in payments.
And the problem compounds over time – CRFB says by 2099, that cut could surpass 30% if nothing changes.
A new law, the One Big Beautiful Bill Act (OBBA), signed this summer, has only accelerated the timeline.
By expanding the standard deduction for seniors and reducing taxes on Social Security income, OBBA reduces incoming revenue for the program and moves up the expected depletion date by about a year.
If its tax cuts and deductions become permanent, benefit cuts could become even larger.
Can Congress prevent the Social Security crisis?
While the prospect of benefit reductions seems dire, most policy experts believe lawmakers are unlikely to allow such a drastic change to go into effect.
Historically, Congress has acted only at the last minute – as seen in the 1980s, when it raised the retirement age and began taxing Social Security benefits to keep the trust fund solvent.
Possible solutions on the table include raising the payroll tax, increasing the retirement age, eliminating the cap on taxable income, or adjusting benefits paid to higher earners. Without decisive action, however, the clock is ticking.
The bottom line: For millions of current and future retirees, Social Security remains an indispensable part of financial stability.
But unless Washington finds a solution, the checks that Americans rely on could shrink dramatically – and the effects could last for generations.