Concerns regarding the future stability of the Social Security program have been growing in recent years, with many fearing that the program might not be there to support them in the future. These concerns and fears have come about as a result of the projected shortfall to a major trust fund outlined in the latest annual report from the Social Security Board of Trustees.
It is worth noting that that due to the manner in which the program’s finances are sourced, Social Security can never become 100% insolvent. However, cuts of up to 23% to benefits are unfortunately very much on the table if no sustainable change is made to the program now.
In the past when the program was facing similar financing issues, it was decided that the Full Retirement Age would be gradually increased from 65 to 67. Now again, word had spread that lawmakers were considering increasing the retirement age further to help prevent this shortfall.
Last week in a post on X, however, Social Security Administration (SSA) Commissioner Frank Bisignano clarified that raising the retirement age was not under consideration. Here is everything you need to know.
Social Security on the road to insolvency?
Social Security‘s main source of revenue is the dedicated payroll tax to which workers contribute a percentage of their earnings. This revenue is, however, supplemented by two major trust funds: the Old Age and Survivors Insurance (OASI) trust fund, and the Disability Insurance (DI) trust fund. As per the report, the OASI trust fund is projected to become insolvent by 2033, resulting in an automatic cut to benefits of 23%.
If the two funds are combined into one OASDI fund, the combined fund would become insolvent by 2034, with the remaining revenue in the program only being sufficient to cover 81% of scheduled benefits. “Both the OASI and OASDI depletion dates advanced by about 3 calendar quarters, relative to last year’s projection,” the trustees wrote.
Retirement age
Benefits can be claimed from age 62, however, this is considered as claiming early since it is not the Full Retirement Age (FRA). If you claim early, you will be subject to a benefit reduction of up to 30% depending on how many months remain before you reach FRA.
As noted above, the FRA has been gradually increasing in two month increments since the 1983 Amendments. In 2025, the FRA rose to 66 years and 10 months for those born in 1959, and in 2026, the FRA will finally reach 67 for those born in 1960 and later.
The FRA is not meant to increase beyond this, however, due to the projected shortfall, many began wondering if increasing the FRA further was a possibility. The good news is that the FRA will not likely be increased further, as clarified by the SSA Commissioner on X.
The post read as follows: “Let me be clear: President Trump and I will always protect, and never cut, Social Security. That’s why we have made many vital reforms, such as cutting waste, fraud, and abuse from the program, to ensure the solvency of Social Security for future generations of Americans. Raising the retirement age is not under consideration.”
What would happen if the FRA is increased again?
Whilst it is not under consideration, GOBankingRates asked ChatGPT for a breakdown of what things would look like if the FRA was increased from 67 to as high as 70. The response read as follows: “If the FRA increases from 67 to 68, monthly benefits would decline for everyone. Claiming at 62 would result in even steeper reductions, and delaying past the new FRA wouldn’t provide as large a benefit increase.”
“Low earners and individuals in physically demanding jobs would bear the brunt of benefit reductions,” ChatGPT further explained. “Construction workers, healthcare aides and others in taxing professions may struggle to work longer.”
Additionally, by using policy analysis, the AI calculated that, “a proposal to raise FRA to 69 by 2033 could strip away 13% of benefits, equating to about $3,500 annually or $420,000 over a 30-year retirement.”