New analysis warns that the looming depletion of the Old‑Age and Survivors Insurance (OASI) trust fund would slash benefits for millions of households.
The Committee for a Responsible Federal Budget (CRFB) projects that couples with two lifetime earners who retire in January 2033 would collect roughly $18,100 less per year than today—about a 24 % haircut. The culprit is the expected exhaustion of the OASI trust fund in late 2032, when payroll‑tax inflows will cover only part of promised checks.
Why the OASI trust fund’s projected 2032 depletion spells a 24 percent benefit haircut in 2033
Payroll taxes flowing into OASI no longer keep pace with the swelling retiree population, and the reserve account is on track to run dry in just over seven years. Once the balance hits zero, current law forces the Social Security Administration to pay benefits only with incoming revenue. That means every recipient—whether a recent claimant or a centenarian—would see roughly one‑quarter of each monthly payment vanish overnight.
Average annual losses range from $11,000 to $24,000 depending on income, work history and marriage status. Need a quick snapshot of the hit? Check the figures below:
| Household type | Estimated annual cut* | Share of current benefit |
|---|---|---|
| Two‑earner middle‑income couple | $18,100 | –24 % |
| Single‑earner couple | $13,600 | –24 % |
| Dual‑earner low‑income couple | $11,000 | –24 % |
| High‑income couple | $24,000 | –24 % |
*Nominal dollars; CRFB 2025 projection.
Although smaller in dollars, the trim would bite deeper into a modest household’s budget. Nearly 67 million Americans now rely on Social Security, and surveys show the vast majority count it as a pillar of retirement income. So, what does this mean for your own nest egg?
Lawmakers weigh tax hikes and age shifts to keep Social Security paying full benefits beyond the next decade
Congress has options, yet none are painless. The CRFB lists several levers:
- Raise the combined payroll‑tax rate modestly.
- Lift or scrap the taxable wage cap so higher earnings support the system.
- Gradually push the full retirement age upward to reflect longer lifespans.
- Trim benefits for high earners while shielding lower‑income seniors.
- Adopt a mix of revenue and benefit changes to spread the burden.
The recently enacted One Big Beautiful Bill Act complicates matters by shaving revenue through bigger senior deductions, nudging the required cut even higher if no fix is passed.
If lawmakers do nothing, a universal 24 % reduction will begin the moment the trust fund empties. Retirees—and those planning to retire soon—should keep tabs on Capitol Hill and consider diversifying income sources now. After all, delaying action only widens the gap Washington must close.