Social Security trust fund could run out in 2032, earlier than expected according to CBO

[New Breed Leader]

https://www.cbsnews.com/news/social-security-trust-fund-cbo-estimate-2032-inflation/

Social Security's main trust fund could be depleted a year earlier than expected, according to a projection from the Congressional Budget Office (CBO) released earlier this month.

The CBO forecasts that the Old-Age and Survivors Insurance Trust Fund — one of the two funds Social Security taps to disburse benefits — will be exhausted in 2032. The agency, which provides budgetary analysis to Congress, estimated last year that the trust fund would run dry in 2033.

Although the Social Security Administration wouldn't stop administering benefits if the trust fund reserves are depleted, the agency could be forced to trim the amount it pays to beneficiaries, according to experts.

"My takeaway from all of this is we don't have much time to spare to address the shortfall," Max Richtman, CEO of the National Committee to Preserve Social Security and Medicare, a nonprofit advocacy group. "If there's not enough revenue coming in payroll taxes — and I don't see that changing — benefits are going to be cut dramatically."

The Social Security Administration did not respond to a request for comment.

Why CBO changed its forecast
The CBO changed its Social Security funding projection after updating its economic forecast, which predicts hotter inflation in the coming years. That could affect Social Security's annual cost-of-living adjustment (COLA), which is aimed at ensuring that inflation doesn't erode beneficiaries' purchasing power.

Higher inflation could mean a larger COLA, which would draw down the trust fund more quickly. The CBO forecasts a COLA of 3.1% for 2027, on the higher end of projections. The agency announced a 2.8% COLA for 2026.

The CBO also projects Social Security trust fund income will be lower because of a reduction in individual income taxes and payroll taxes.

Diminishing trust fund reserves
The Social Security Administration started tapping into the trust fund reserves in 2021, when the total cost to provide benefits started to outpace the agency's income. Social Security, which is funded chiefly through payroll taxes paid by workers and employers, is facing greater financial strains as the U.S. population ages and more people claim retirement benefits.

"As long as people are paying in, money is coming in," Richtman said. "But the point is, it's not enough to pay full benefits. The trust fund has been relied on over the last few years to fill in that gap."

The Center on Budget and Policy Priorities, a Washington, D.C.-based nonpartisan think tank, said last year that the Social Security Administration will be able to pay roughly 81% of promised benefits once the trust fund reserves evaporate.

[Efilroft Sul]

1. Just as I go to collect it, as George Carlin predicted.

If I'm healthy, there will be hell to pay, and it won't be through no goddamn political process that led us here, either.

[bigtree]

2. it's 100% about political will

...and the balance of power in Congress and the WH.

President Trump has promised to protect Social Security, but the fine print of his agenda points to a very different outcome for retirees, workers, and people with disabilities. Independent analysts now warn that his approach could speed up the program's financial crunch, reshape how benefits are delivered, and quietly trim support for some of the most vulnerable Americans. In practical terms, the emerging picture is a Social Security strategy that delivers four major blows: earlier insolvency risk, higher exposure for near-retirees, disruptive administrative changes, and targeted cuts to disability protections.
https://www.msn.com/en-us/money/retirement/report-says-trumps-social-security-plan-triggers-4-big-hits/ar-AA1RD26o

[Igel]

7. Everything that increases draw-down affects it.

This game's been going on for more than just the past year.

I'm a teacher. A law in the not-so-recent past lets me collect more OASI now than I could have in 2024. That helped the CBO's estimate, since it quickened the draw-down of the 'trust fund'.

It was a bad thing to mention this at the time.

[bigtree]

9. raising the income cap for Social Security's payroll tax to address the shortfall

...is one example of a matter of political will and circumstance.

I don't understand feeling responsible for the shortfall because of benefits that you accrued.

It doesn't make sense to blame demands on the system for politicians failure to construct a workable one; especially when one party is doing everything they can to block solutions, even as they opportunistically point to weaknesses which are a direct result of their own deliberate fecklessness.

[SheltieLover]

3. Raise the wage cap!

[Srkdqltr]

4. You realize that 15 minuts after the very first SS check went out people have been predicting

That SS will go broke in a few, somethings. And yet here we are.

[PuraVidaDreamin]

5. Faster if we can't stop them in November.

[pat_k]

6. Lift the cap. High earners should be contributing more. Period.

That would keep it solvent into the foreseeable future.

Or perhaps they would prefer to step over starving seniors on the streets?

[Turbineguy]

8. Let's re-elect that piece of shit

That way it runs out even faster!

[NewHendoLib]

10. Raise. The. Fucking. Wage. Cap.

[Jacson6]

11. SSA will not run out of money. The worst that can happen is that it will be reduced by 25%.

But all Congress Critters have to do is raise the FICA taxes by 1% and increase the income cap on FICA taxes to $200K.

I can't imagine that they will sit on their hands while millions of elderly voters have their SSA cut by 25% in a election year. IMHO

[misanthrope]

12. That's what the overlords are hoping for

The more desperate the plebes are then the easier they are to exploit or deplete.