Social Security Retirement Checks Could Be Cut 26 Percent in 6 Years, Analysis Finds

Social Security retirement checks could be cut by about 26 percent in six years if Congress does not address the program’s funding shortfall.

“The longer it takes to address Social Security’s solvency shortfall, the greater the cost of fixing it will become,” CRFB said in its Sept. 21 analysis.

CBO’s Sept. 17 projections put the retirement and survivors fund’s depletion in fiscal 2032. CRFB estimates that income flowing into the fund after its reserves are depleted would cover about 74 percent of scheduled retirement benefits. Revenue would continue coming in, but it would not be enough to pay full scheduled benefits under that scenario.

The retirement fund is separate from disability insurance trust funds, and Social Security’s trustees, who issue an annual report on the program’s finances, project that the disability fund’s reserves will remain positive through 2100.

CRFB examined what would happen if lawmakers allowed the two funds to use resources together. Based on CBO projections, it said the combined reserves would run out in 2033, when continuing income would cover about 77 percent of scheduled benefits—a 23 percent shortfall.

For the retirement fund alone, CRFB said the projected benefit cut would rise to 40 percent by 2100. The group gave a different estimate if lawmakers allowed the retirement and disability funds to share resources.

“Assuming policymakers reallocate funds from the financially stronger disability fund, the theoretically combined funds would still run out by 2033 and beneficiaries would still face a 23% cut, growing to 37% by 2100,” CRFB said.

In their separate combined-fund projection, reserves would last until 2034, when income would cover 83 percent of scheduled benefits.

The trustees said lower birth-rate and immigration projections, along with reduced revenue from taxes on benefits under the 2025 tax law, worsened the outlook.

“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare,” the trustees said.