Overview
- The Social Security Board of Trustees, in a report released June 9, projects the Old‑Age and Survivors Insurance (OASI) trust fund will exhaust reserves in the fourth quarter of 2032 and that combined OASDI reserves would deplete by the third quarter of 2034.
- An independent Penn Wharton Budget Model forecast published this month projects slightly later dates — OASI in February 2033 and combined funds in February 2035 — but it reaches the same conclusion that a large financing gap demands policy changes soon.
- The trustees put the 75‑year actuarial shortfall at 4.42% of taxable payroll while PWBM estimates about 4.65%, and both analyses show that closing the gap now would require a multi‑percentage‑point payroll tax increase or equivalent benefit cuts.
- Trustees and analysts say the deterioration stems mainly from lower fertility, reduced immigration assumptions, and revenue losses tied to the 2025 tax law change that cut taxes on some Social Security benefit income.
- If lawmakers take no action, incoming payroll taxes would pay only about 78% of scheduled retirement benefits after depletion which for the average monthly benefit of roughly $2,080 would mean a loss near $450 per month for many retirees and greater hardship for households that rely on Social Security as their main income.