October 26, 2026

When will Social Security run out of money? What to expect.

Social Security isn’t running out of money. However, its reserves, specifically for the Old-Age and Survivors Insurance (OASI) trust fund, are expected to be depleted by the fourth quarter of 2032. The program will not stop making payments, but retirees could see a minimum 22% projected reduction in benefits if Congress doesn’t act.

Understanding the Social Security trust fund

The Social Security trust fund refers to two programs—Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) — both funded primarily through payroll taxes.

“The OASI trust fund, which pays out Social Security retirement and survivor benefits, is now projected to run out of reserves in the fourth quarter of 2032,” said Will Allen, CRPC, founder and financial advisor at Sentara Capital, via email.

For decades, OASI reserves grew steadily, mainly from higher payroll taxes and a delayed retirement age as part of the 1983 reform. But its cushion peaked in 2020. By 2021, the program’s costs began exceeding total income, forcing the Social Security Administration to begin drawing on reserves to cover the gap.

With costs continuing to outpace tax revenue, the Social Security Board of Trustees projects the OASI reserves to zero out by 2032. The DI trust fund reserve, which benefits disabled workers and their families, is expected to last through its entire 75-year projection window.

What the trust fund deadline actually means

The 2032 deadline for the OASI trust fund refers to when Social Security can no longer cover 100% of retirement benefits. But retirees shouldn’t expect to lose benefits completely.

“It’s not that Social Security will go away, as many people think,” said Allen. “Payroll taxes will still fund the system, but everyone receiving Social Security at that point would get a 22% cut in their benefits.”

Without bipartisan action, the Social Security Board of Trustees estimates beneficiaries will receive 78% of OASI benefits in the fourth quarter of 2032. Here’s how projected cuts could affect different beneficiaries, assuming a primary retiree earning $48,000 in lifetime annual income.

The 22% reduction might hit married households harder, with the combined loss for the primary worker and their spouse totaling $684 per month, or $8,208 annually.

Why the trust fund depletion date keeps moving

The trust fund depletion deadline may feel like a moving target because it’s adjusted annually based on changes in the economy.

In their recent report, the trustees moved the project OASI depletion date from 2033 to 2032. Several factors contribute to this, including:

Demographic shifts: The workforce isn’t keeping up with the unprecedented number of Americans entering retirement (with longer life expectancies than previous decades). This is combined with lower projections for fertility and immigration, which negatively affect workforce size in the long term.
Legislative tax changes: The One Big Beautiful Bill Act includes tax deductions for seniors that lower their Social Security tax liability, but also reduce the tax revenue that flows back into the trust fund.
Higher wages ≠ higher trust fund: There’s a limit to how much wages are taxed, and this limit hasn’t kept pace with wage growth. More income is earned above the maximum taxable wage, which increases the benefit without increasing what flows into the trust fund.

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How Washington can respond

Congress can implement economic policies that increase Social Security tax revenue, decrease expenses, or do both.

Increase taxes: Higher Social Security taxes, a higher maximum taxable income, or taxing non-wage income increases tax revenue.
Raise the retirement age: Delaying the full retirement age means lower benefit payouts over a lifetime, reducing the fund’s expenses.
Decrease benefit payouts: Directly reducing benefit payouts shrinks the Social Security revenue-expenses gap.

These policy changes require bipartisan support and, even then, wouldn’t be a quick fix.

A more immediate change involves combining the OASI and DI trust funds, which would push out the reserve depletion date to 2034, with a 17% benefit cut once empty. However, this is a temporary solution that could buy time to address the larger income-expenses gap.

What this means for your financial plan right now

While 2032 may feel far away, workers and retirees alike should start thinking about it now.

“Anyone who expects to begin Social Security by 2032, or who is already receiving benefits, will be impacted,” said Allen.

Allen explained that while he expects Social Security to remain available, the full retirement age could rise, benefits could be reduced, or taxes could increase—making it important to save now.

Here are a few steps workers can take now to build more financial security in retirement.

Diversify your retirement income sources: Prioritize tax-advantaged retirement savings plans, such as a 401(k) or an IRA. Talk with a financial planner to explore how other financial products, such as taxable brokerage accounts or guaranteed income, may work for your situation.
Consider delaying your target retirement age: While you can claim retirement benefits at age 62, you don’t get your full benefit unless you wait until full retirement age—and you get a larger payout if you wait until age 70.
Don’t forget a budget: Create a retirement spending plan to make it a little easier to live within your means. And if you’re already receiving benefits, you can look at your budget to see how a 22% benefit cut would affect you.

Social Security in 2032: Myths vs. facts

With several misconceptions about Social Security trust fund reserves, keep these facts in mind.

The bottom line

Social Security retirement benefits will not disappear, but depleted OASI reserves could reduce benefits for retirees beginning in late 2032. Current workers can prepare for the shortfall by diversifying their retirement savings and aiming to claim Social Security after their full retirement age, if that fits their personal situation.

When will Social Security run out of money? FAQs

Is Social Security going bankrupt?

No. Social Security is not going bankrupt. It’s primarily funded by payroll taxes, which isn’t expected to change anytime soon. What is changing is the Old-Age and Survivors Insurance (OASI) trust fund—its reserve funds are expected to be depleted by Q4 2032, resulting in reduced payouts.

Will Social Security be there when I retire?

Yes. Social Security will likely still be available when you retire. It’s a pay-as-you-go system, meaning there will be some level of payout even if reserves are empty. There’s also a historical precedent of Social Security reform as reserves approach critical levels.

What happens if the Social Security Trust Fund runs out?

If the OASI trust fund reserve runs out, the board of trustees projects that Social Security would cover 78% of retirement benefits.

How much will Social Security benefits be cut?

The Social Security Board of Trustees estimates a 22% benefit cut if there’s no bipartisan action to address the depleting OASI reserves. That means a retiree receiving $2,000/month would automatically begin receiving $1,560/month (a loss of $440/month or $5,280 per year).

Should I claim Social Security early because of the trust fund deadline?

The earliest you can claim Social Security retirement benefits is age 62, and doing so permanently reduces your benefits. Generally, the longer you wait to claim benefits, the higher your monthly payout. However, it’s best to look at your personal situation — for example, your health, retirement goals, and tax situation — to decide what’s best.