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Social Security retirement benefits could be automatically and completely reduced in as little as six years.
Without intervention by then, the Social Security Retirement Trust Fund (officially known as the Old Age and Survivors Insurance Trust Fund), which helps pay benefits to eligible workers and eligible family members, will be depleted in the fourth quarter of 2032, the program’s governing board said in a June report.
In doing so, the Trustees anticipate that severance benefits will be reduced by 22%.
The Congressional Budget Office has an even more dire forecast, predicting that retirement trust funds could run out in mid-2032 and that retirees could see benefit cuts as deep as 26% in the event of bankruptcy.
Based on the 24% benefit cut, beneficiaries across the U.S. could see their monthly benefits cut by an average of $500, according to a June report from the Committee for a Responsible Federal Budget. The average reduction for retirees will be even larger in 29 states, according to the nonpartisan organization focused on educating the public about fiscal policy issues.
The senators elected this November will take office in 2032, when the retirement trust fund reaches its depletion date. Their ability to right the ship is critical to retirees and the economy. However, given the political situation within the ring road, that is far from certain.
“Focusing 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 for economic policy at the Bipartisan Policy Center, a public policy think tank focused on promoting bipartisan cooperation.
“Nothing moves Congress more than a deadline like that,” he said.
Of course, brinkmanship and political gridlock could hamper efforts. Rather than enacting changes to strengthen Social Security that might require tax increases, benefit cuts, or a combination of both, Congress may choose to eliminate future possibilities.
If lawmakers decide to combine Social Security’s retirement and disability trust funds, the depletion date could be pushed back to the third quarter of 2034, at which point benefits could be cut by 17%, according to Social Security trustees.
Akabas said lawmakers’ delays will have an impact and the Social Security deficit will continue to grow.
There could also be an economic impact, he said.
Social Security benefits generated $2.6 trillion in total economic output in 2023 and supported more than 12 million jobs, according to a 2025 study by the Washington, D.C.-based nonprofit, nonpartisan National Institute on Retirement Security.
A 19% benefit cut could reduce gross domestic product by hundreds of billions of dollars, according to a NIRS study.
Additionally, a study released in June by George Mason University’s Mercatus Center found that failure to mobilize social security reform would increase stress in the bond market.
Social Security is tied to the bond market because its trust funds are invested in special issues of U.S. Treasury bonds.
A delay in Social Security reform could put upward pressure on U.S. Treasury yields as investors seek higher returns on long-term bonds.
Delays in reform could lead to higher interest rates and borrowing costs, or inflationary adjustments that erode the value of government debt, according to Mercatus Center research. According to the study, these changes could impact household finances through higher borrowing costs, not just for student loans, but also for mortgages, auto loans and other consumer loans.
If interest rates and prices rise, economic growth will be hampered, Akabas said.
“These impacts, in addition to benefit adjustments, are also being felt by the American public,” Akabas said.
Heading into the midterm elections, some Democratic House candidates say they would raise or eliminate the Social Security payroll tax cap so that high-income earners pay more into the program. In 2026, the 6.2% tax, paid by both workers and their employers, will apply to income up to $184,500.
But it remains to be seen whether leaders in Washington will have the political will to address the issue soon. Tax increases, in particular, may not be seen as politically popular heading into the 2028 presidential election.
As a result, it’s “very unlikely” that payroll taxes will rise in the next few years, said Jessica Riedl, a fellow at the Urban-Brookings Tax Policy Center, which provides independent analysis of tax issues. If a tax increase were to occur, it would likely be closer to 2032, she said.
“In Washington, they like to wait until the last moment,” Riedl said. “In the short term, neither side has any interest in this type of tax increase. In the long term, I think everything is on the table.”
The National Commission on Social Security and Medicare Preservation, founded by former Congressman James Roosevelt, son of President Franklin Delano Roosevelt, scored incumbent members’ votes on whether they protected these programs.
The advocacy group also supports candidates who support raising payroll taxes and protecting Social Security benefits from cuts. Dan Adcock, NCPSSM’s director of government relations and policy, said NCPSSM recognizes this support by presenting candidates with boxing gloves as a symbol of their fight for Congress.
The organization said it is also working to educate voters that the senators elected this year are among those working on Social Security.
“We’ve been trying to impress upon voters why this should be a top issue,” Adcock said. “They need to ask candidates what their plans are for the program.”
