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These estimates are based on the projections of the 2026 Social Security Trustees’ Report, which projects that Social Security’s retirement fund will be exhausted in the final quarter of 2032. On a theoretically combined basis, the Social Security Trustees project that the combined trust funds will run out in mid-2034, less than two years later.
Over time, the necessary cuts to benefits after insolvency would grow. In 2032, benefits would need to be reduced by 22% to bring costs in line with program revenues. But by the end of the century, the required cuts would grow to 38%.
These cuts would be devastating for beneficiaries. If a similar cut were imposed on retirees today, the average retiree would lose around $500 in benefits per month, more than what the average retired household spends on groceries. The effects would be felt nationwide, and no state would be spared from the impacts of insolvency.
Just six months after retirees are expected to see sudden cuts to their Social Security benefits, the Medicare Trustees project the Medicare Hospital Insurance trust fund will run dry, necessitating an 11% reduction in hospital spending. Such a cut would threaten retirees’ access to health care as payments to providers are delayed or denied.
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