Social Security recipients set to face an $18,000 benefit cut in just seven years

The Social Security and Medicare trust funds are projected to be just over seven years away from insolvency, according to calculations that combine the programs’ official Trustees’ estimates with our analysis of the effects of the recently passed One Big Beautiful Bill Act (OBBBA). Under current law, once these trust funds run out of reserves, benefits can only be paid from incoming revenue. For Social Security’s retirement program, that would mean a 24% across-the-board cut to benefits beginning in late 2032 — the first year after OBBBA takes effect.

For a dual-earning couple retiring at the start of 2033, this would translate to an annual benefit loss of roughly $18,100, just months after the trust fund goes insolvent. At the same time, retirees could see diminished access to health services due to an 11% reduction in Medicare Hospital Insurance payments. Over time, these cuts would deepen as promised benefits grow faster than the dedicated revenues meant to fund them.

The exact size of the cut would depend on a couple’s income level, work history, and marital status. A typical single-earner couple could lose about $13,600 per year, while a dual-earner low-income couple might face an $11,000 cut. High-income dual-earner couples could see a reduction closer to $24,000 annually. While the dollar amount for lower-income retirees is smaller, the hit would represent a significantly larger portion of their total income and lifetime earnings. All of these figures are in nominal dollars; when adjusted to 2025 dollars, they would be roughly 15% lower.

The gap between Social Security’s revenue and expenses is projected to grow steadily, which means automatic benefit reductions would also increase over time. By 2099, the required cuts could exceed 30%, a much steeper hit than in the early years of insolvency.

These projected reductions are slightly larger than those in the latest Trustees’ report because OBBBA — with its tax rate cuts and expanded senior standard deduction — will lower Social Security’s revenue from the taxation of benefits. That change alone increases the initial insolvency-year cut by about one percentage point. If Congress makes OBBBA’s temporary tax provisions permanent, the size of the cuts would grow even larger.

Elected officials who vow never to touch Social Security are, in effect, accepting these deep, automatic cuts for 62 million retirees starting in 2032. The reality is that without legislative action, these reductions will be unavoidable. Policymakers need to level with the public about the program’s true financial outlook and act now to secure the trust funds — ensuring stability and sustainability for current retirees and generations to come.