The Social Security trust fund is expected to run out of cash in eight years

A new projection by the Social Security Administration’s chief actuary warns that the program’s trust funds will begin to run short by 2034, resulting in only about 81% of promised benefits being paid unless corrective measures are taken. This comes in the wake of the “One Big Beautiful Bill Act” (OBBBA), signed into law by President Trump in July 2025, which significantly altered tax policy and is now expected to accelerate the depletion of Social Security’s resources.

The OBBBA provides tax relief, especially to seniors, including an expanded standard deduction. However, these changes reduce income tax revenue flowing into the Social Security and Medicare trust funds. The SSA estimates that the new law will increase the program’s costs by about $168.6 billion over the next decade, weakening the trust funds’ actuarial balance from -3.82% to -3.98%. If these temporary tax breaks become permanent, even deeper benefit cuts may be needed.

The looming funding shortfall raises alarms not only for today’s 70 million beneficiaries but for future generations who depend on Social Security for retirement and disability support. Without legislative intervention, beneficiaries face an automatic 24% cut by late 2032, with that number potentially growing to over 30% by the end of the century. A dual-earning couple retiring in early 2033 could see their benefits slashed by $18,100 annually.

The Committee for a Responsible Federal Budget (CRFB) argues that the situation is worsened by the OBBBA’s tax cuts, which reduce the income taxation of benefits and strain Social Security’s revenues further. They caution that Medicare's trust fund is facing a similar trajectory, with projected insolvency just one year earlier, in 2033.

Alongside policy changes, long-term demographic trends—such as the aging baby boomer population, lower birth rates, and slowed wage growth—are contributing to the system's fragility. Despite reassurances from SSA officials about their commitment to maintaining the program’s viability, experts and lawmakers agree that major reforms are urgently needed to prevent sharp benefit reductions and ensure the long-term stability of both Social Security and Medicare.