In 2033, Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund is expected to run out of money. That could lead to a 23% cut in benefits for everyone receiving Social Security — which equals a loss of $17,400 per year for a typical dual-income retired couple.
This potential benefit reduction has serious implications not just for future retirees, but for current ones too. If you depend on Social Security for part or all of your retirement income, understanding what’s at stake — and what you can do now — is critical.
$17,400 in Yearly Payments Without Social Security
| Topic | Details |
|---|---|
| Projected Insolvency Year | 2033 |
| Benefit Reduction | 23% across-the-board |
| Annual Cut for Typical Dual-Income Couple | $17,400 |
| Annual Cut for Low-Income Couples | $10,600 |
| Annual Cut for High-Income Couples | $23,000 |
| Reason for Cuts | OASI Trust Fund depletion |
| Official Resource | SSA Solvency Proposals |
A projected $17,400 annual loss in Social Security benefits for the average dual-income couple isn’t just a number — it’s a wake-up call. With the OASI Trust Fund on track to be depleted by 2033, it’s more important than ever to understand the issues, prepare personally, and advocate for change.
Don’t leave your retirement to chance. Start planning now and help shape a future where Social Security remains strong for generations to come.
How Did We Get Here? A Brief History of Social Security
Social Security was signed into law in 1935 to provide retirement income and protect Americans against poverty in old age. At the time, the U.S. had far more workers than retirees — meaning plenty of money coming in to pay for those receiving benefits.
But today, things have changed.
- People are living longer.
- Birth rates are lower, so fewer workers are paying into the system.
- The Baby Boomer generation is retiring, drawing down more from the system than ever before.
That’s why the 2023 Social Security Trustees Report forecasts that the OASI Trust Fund will run dry by 2033, and only incoming payroll taxes will be available to cover benefits — about 77% of what’s currently promised.
According to the Social Security Administration, without action, the system will only be able to pay three-quarters of scheduled benefits beginning in 2033.
What a 23% Cut Looks Like: Real-Life Impact
Let’s make this more tangible.
- Meet Tom and Linda, both 67, newly retired. Together, they receive $6,300 per month in Social Security benefits — about $75,600 per year.
- A 23% cut means they would lose $1,450 per month, or $17,400 per year.
- If they live another 20 years, that’s $348,000 in lost income.
For lower-income couples, the dollar amount is smaller, but the impact is much greater. Many depend on Social Security for 90% or more of their retirement income.
What’s Causing the Funding Crisis?
The imbalance is driven by:
- Longer life expectancies – People live longer, collect benefits for more years.
- Lower birth rates – Fewer workers to support retirees.
- Wage stagnation – Contributions via payroll tax haven’t kept pace with benefit growth.
- Inefficient funding structure – The payroll tax cap means high earners stop contributing after a certain point ($168,600 in 2024).
What Can Be Done to Fix Social Security?
Lawmakers have several policy tools available. Here are the most discussed:
1. Increase Payroll Taxes
Raise the payroll tax from 12.4% to 14.8% gradually, or eliminate the wage cap so that high earners contribute more.
2. Raise the Retirement Age
Adjust full retirement age from 67 to 68 or 69 for future retirees, reflecting longer life spans.
3. Change the COLA Formula
Use a more conservative inflation measure like the chained CPI, which rises more slowly than the current index.
4. Means-Test Benefits
Reduce or cap benefits for high-income retirees.
Explore the full list of proposed reforms on the official SSA website.
What You Can Do: 5 Smart Steps to Prepare
Even if Congress hasn’t acted yet, you can take control of your retirement outlook:
1. Diversify Your Retirement Income
Don’t rely solely on Social Security. Use IRAs, 401(k)s, Roth accounts, pensions, or rental income.
2. Use Retirement Planning Tools
Try the SSA Retirement Calculator to forecast your benefits and plan scenarios.
3. Delay Your Benefits
If you can wait until age 70 to claim Social Security, your monthly check could be 24%–32% larger.
4. Cut Debt and Expenses
Free up cash flow now to save more or reduce your retirement cost of living.
5. Consult a Financial Planner
A certified planner can help you adjust your plan based on future benefits, taxes, and inflation.
Expert Insights
“The longer we delay reforms, the more painful they become. Small changes now can save Social Security for future generations.”
— Maya MacGuineas, President of the Committee for a Responsible Federal Budget
“The 23% across-the-board cut would be devastating for millions of retirees, especially low-income households.”
— Alicia Munnell, Director of the Center for Retirement Research at Boston College
Frequently Asked Questions (FAQs)
1. Will these cuts affect me if I’m already retired?
Yes. If no reforms are passed, all current and future retirees will receive smaller benefits starting in 2033.
2. Will Social Security go away entirely?
No. Even if the trust fund is depleted, payroll taxes will still cover about 77% of scheduled benefits.
3. Can Congress still prevent the cuts?
Yes. Lawmakers can pass reforms at any time. However, the longer they wait, the more drastic those reforms must be.
4. Where can I learn more?
Visit the SSA’s Solvency Options Page and follow updates from CRFB.
