Social Security recipients could see $18,000 cut in benefits by 2032, analysis warns

LOS ANGELES – Millions of seniors could face devastating cuts to their Social Security benefits in just over seven years, according to a new analysis released Thursday by the Committee for a Responsible Federal Budget (CRFB).

The report projects that the Social Security and Medicare trust funds are on track to run out of reserves by late 2032. When that happens, federal law requires that payments be limited to incoming payroll taxes, triggering an automatic 24% benefit cut for retirees unless Congress acts.

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The cause, in part, is linked to new tax provisions under the One Big Beautiful Bill Act (OBBBA)—a sweeping piece of legislation that reduced revenue into the trust funds, speeding up depletion.

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What would benefit cuts look like?

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By the numbers:

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If no action is taken, the CRFB projects that:

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• A typical dual-earner couple retiring in 2033 would lose $18,100 per year in Social Security benefits.
• Single-earner couples would see an average annual cut of $13,600.
• Low-income dual-earner couples would lose about $11,000 annually, while high-income couples could see cuts as high as $24,000.

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While wealthier couples would lose more in raw dollars, lower-income retirees would lose a larger share of their income, leaving them more vulnerable to poverty.

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In addition, the analysis estimates that retirees would face an 11% cut in Medicare hospital insurance payments, potentially reducing access to care.

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What we know:

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The CRFB’s updated projections exceed those in the latest official Trustees’ report, largely due to new tax cuts and an expanded senior deduction included in OBBBA. These changes reduce revenue from the taxation of benefits, increasing the size of required cuts upon insolvency.

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Once reserves are exhausted, Social Security will operate on a pay-as-you-go basis, distributing only what it collects in taxes.

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The gap between incoming revenue and scheduled benefits will continue to widen as the population ages, potentially pushing required benefit cuts to over 30% by 2099 if left unaddressed.

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What we don’t know:

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It remains uncertain whether Congress will intervene in time to prevent the automatic cuts.

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No formal plan has been introduced to replace the lost revenue, and previous attempts to shore up the trust fund have stalled in partisan gridlock.

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There’s also no clear path for how the government might restructure benefits, raise taxes, or shift retirement age thresholds to stabilize the system.

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Why you should care:

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According to the CRFB, allowing the automatic cuts to occur would at least double the poverty rate among older Americans. The report warns that pledging not to “touch” Social Security may be politically popular, but effectively endorses these steep cuts for more than 60 million retirees starting in 2032.

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Social Security remains one of the most universally supported government programs. Despite that, the last time Congress acted to prevent insolvency was in the 1980s—and only after the system was weeks from defaulting. Lawmakers at the time raised the retirement age and began taxing benefits to preserve payouts.

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What’s next:

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If Congress fails to act before the 2032 deadline, the law will require the automatic cuts to take effect. Some policymakers are now calling for open, honest conversations about funding solutions—whether through revenue increases, benefit adjustments, or a bipartisan plan to modernize the system.

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