Approximately 53 million retired Americans rely on Social Security for monthly income. In the year 2023, this program lifted approximately 22 million people about the federal poverty line, this includes 16.3 million seniors aged 65 and above. Without it, nearly 37% of elderly Americans would fall below the poverty line. Thanks to Social Security, that number drops to just over 10%, according to the Centre on Budget and Policy Priorities.
Despite its importance, the future of Social Security is looking increasingly uncertain. Recent data shows that benefit cuts could arrive sooner than expected, unless Congress acts.
The Clock Is Ticking on Social Security’s Funding Crisis
Since 1940, the Social Security Board of Trustees has put out an annual report tracking the program’s finances. It looks at how much money came in and went out the previous year, but the part people care about most is the long-term outlook. The report tries to predict the next 75 years, factoring in things like population changes, economic trends, and government policy.
Unfortunately, these reports have issued warnings for decades. Following the 1983 Social Security Amendments, the Trustees began predicting long-term funding issues and every report since 1985 has highlighted the same concerns. The crux of the problem? Social Security’s income isn’t keeping up with its obligations, including benefit payments and Cost-of-Living Adjustments (COLAs).
The most recent report, released in 2025, shows a staggering long-term funding shortfall of $25.1 trillion through 2099. But the more urgent problem lies with the Old-Age and Survivors Insurance (OASI) trust fund, which pays benefits to retired workers and survivors of deceased workers.
OASI Trust Fund on Track to Run Dry by 2033
In 2020, the OASI trust fund had about $2.8 trillion set aside, nearly its highest level ever. But since then, it’s been spending more on benefits than it brings in. That gap is only getting wider, with a massive $441.9 billion shortfall expected by 2032.
By 2033, the OASI trust fund is expected to be completely depleted. But that doesn’t mean Social Security will disappear. Payroll taxes, currently 12.4% of earned income will continue funding the program. So long as Americans work, Social Security benefits will still be paid.
What’s Causing Social Security’s Instability?
A mix of issues has led to Social Security’s financial problems. Despite what some rumours suggest, Congress hasn’t taken money from the program, and undocumented immigrants aren’t the reason it’s struggling. In reality, Social Security’s finances are tracked and reported publicly, and many immigrants, regardless of status, end up paying more into the system than they’ll ever get back
Here are the real culprits behind Social Security’s shaky future:
- Boomers Retiring: A large number of baby boomers leaving the workforce is shrinking the ratio of workers paying into the system versus those drawing benefits.
- Longer Lifespans: When Social Security began, life expectancy was about 63. Today, it’s around 78. People are living and collecting benefits for much longer than the program was designed to support.
- Rising Income Inequality: In 1983, 90% of wages were subject to the payroll tax. As of 2023, that number has dropped to 83%, largely because high earners are seeing faster wage growth than average workers.
- Low Birth Rates: The U.S. fertility rate hit a record low in 2023, which means fewer future workers will be around to support the system.
- Decline in Legal Immigration: Fewer young, working-age immigrants are entering the U.S., reducing the inflow of new payroll tax contributors.
- Congressional Gridlock: Ultimately, lawmakers share the blame. Political gridlock has delayed much-needed reforms, pushing the problem further down the road and increasing the long-term cost of any eventual fix.
A Fix Is Possible, If Lawmakers Can Work Together
Both parties have proposed ways to fix Social Security, ideas range from lifting the payroll tax cap to tweaking how benefits are paid. But any real change needs broad support in Congress, and with 60 votes required in the Senate, nothing has moved forward. In the meantime, time is running out. If lawmakers don’t act soon, benefit cuts could kick in within the next eight years.
Don’t Miss Out on What You’re Owed
A lot of retirees miss out on simple ways to boost their Social Security income, sometimes by thousands each year. Timing your claim right and coordinating with your spouse can have a big impact. If you’re getting ready for retirement, understanding how to make the most of your benefits could mean more money in your pocket and less to worry about later on.