Social Security benefits could be reduced in 2032. Here's what to know

Millions of Americans could see changes to their Social Security benefits in the coming years if a projected funding shortfall isn’t addressed by lawmakers.

The Old-Age and Survivors Insurance Trust Fund, which covers retirement benefits to eligible retired workers and survivor benefits to eligible family members of workers who have died, is projected to deplete its reserves in 2032, according to the 2026 annual Social Security and Medicare Trustees Reports.

So, what does that mean?

The fund is projected to pay 100% of scheduled benefits through the fourth quarter of 2032, one quarter earlier than projected last year, according to the report. Separately, the Congressional Budget Office projects the fund will be exhausted in fiscal year 2032.

If Congress takes no action before the trust fund’s reserves are depleted, continued revenue would cover about 78% of scheduled retirement and survivor benefits.

The Disability Insurance Trust Fund, which covers disability benefits, is in much stronger shape, according to the report. Enough funding exists to pay 100% of scheduled benefits through at least 2100, the end of the report’s projection window.

Together, the retirement and disability trust funds are projected to pay full benefits through the third quarter of 2034. After that, ongoing revenue would cover about 83% of scheduled benefits. The funds cannot legally be combined without a change in law.

Social Security’s long-term financial outlook has worsened in part because of three major factors, according to the Trustees: lower birth rates, lower immigration and changes in federal tax law. The Trustees said provisions of the One Big Beautiful Bill Act are expected to reduce the revenue Social Security receives from taxes on benefits.

It’s important to note that the Trustees project the reserves supporting Social Security retirement and survivor benefits will be depleted in late 2032, not that Social Security will run out of money entirely. The program would continue collecting revenue, including payroll taxes, but available funds would not be enough to cover full scheduled benefits.

Looking ahead, Social Security faces a growing funding gap. The difference between benefit payments and revenues is projected to widen over the next 75 years if current laws remain largely unchanged, according to the CBO.

The Trustees said lawmakers have several options to address Social Security’s long-term funding shortfall.

Potential solutions analyzed by Social Security officials include changes to payroll taxes, the retirement age, benefit calculations and cost-of-living adjustments. The Trustees did not recommend a specific approach, but said acting sooner would give lawmakers more flexibility and time to phase in changes.