Sen. Kirsten Gillibrand put a number on the Social Security problem that is hard to ignore.
“Americans who have worked hard their entire lives deserve every dollar of Social Security they were promised. But due to Trump administration and Republican inaction, their benefits are on track to be slashed by 26% in just six years,” the New York Democrat said in a statement.
Gillibrand, the top Democrat on the Senate Aging Committee, used the moment to push the Social Security Expansion Act, a bill she cosponsors that would apply the payroll tax to earnings above $250,000. In 2026, wages are taxed for Social Security only up to $184,500, according to the Social Security Administration.
Lawmakers in both parties have proposed fixes over the years, and none has passed. The shortfall itself has been projected for decades, across administrations of both parties.
The politics will play out in Washington. The math lands in your mailbox, and some of the decisions that shape your exposure are yours alone.
Where the 26% comes from
The figure traces to the Congressional Budget Office, Congress’ nonpartisan scorekeeper. In long-term projections released Sept. 17, CBO said the Old-Age and Survivors Insurance Trust Fund, which pays retirement and survivor benefits, will be exhausted in fiscal year 2032. At that point, retirees would face a 26% benefit cut, according to the Committee for a Responsible Federal Budget.
Social Security’s trustees are slightly less gloomy. Their 2026 report, released in June, projects the retirement fund will run dry in the fourth quarter of 2032, with “78 percent of benefits payable at that time,” the agency said. That works out to a 22% cut.
Both forecasts assume Congress does nothing, and both point to the same year.
What a cut would do to a typical check
The average retired worker collected $2,087.52 a month as of August 2026. A 22% cut would take about $459 a month from that check. A 26% cut would take about $543, or roughly $6,510 a year.
The projections assume a shortfall would be spread evenly across all benefits, so plan around the percentage, not the dollar amount.
Take the estimate in your my Social Security account at SSA.gov and multiply it by 0.74 and 0.78. If your budget still works at those levels, you have room. If it does not, you have time to adjust before 2032.
Do not let the headlines pick your claiming age
A common reaction to cut warnings is to claim early and “get yours.” That move does not dodge a cut. If a reduction is spread across all benefits, as the projections assume, it would apply to checks people are already receiving, including those who claimed at 62.
What claiming early does guarantee is a smaller check for life. If your full retirement age is 67, claiming at 62 reduces your benefit by 30%, according to the SSA, and each year you wait past full retirement age adds 8% until 70.
A 26% cut would come off whichever check you lock in, so a larger starting benefit still leaves you with a larger monthly payment. For married couples, the higher earner’s claiming age also sets the survivor benefit, which matters even more if benefits shrink.
Many people misjudge these rules; see how you do on the Social Security questions most Americans get wrong.
Build a plan that holds up either way
The safest approach is a plan that works with a smaller check and gets better if Congress acts. That might mean saving a little more while you are working, paying down debt before 2032 or deciding how much of your other savings you would draw if benefits fell.
Those choices interact with taxes and withdrawals in ways that are easy to miss. If you already have $100,000 in savings to protect, get matched with up to three fiduciary financial advisors who are legally required to put your interests first and can help work through Social Security strategy.
The SmartAsset matching service is free and comes with no obligation. Its questionnaire takes about 10 minutes and asks for a phone number near the end, and you decide whether and when to respond to any advisor. SmartAsset connects you with advisors; it does not give advice itself.
Money Talks News may receive a referral fee if you use it. Find a fiduciary advisor now.
Congress has stepped in before. In 1983, as the program neared insolvency, lawmakers raised payroll taxes and the full retirement age. Whether they act again, and how, is out of your hands. How much a cut would hurt your household is not.
Add a Comment