Social Security’s retirement trust fund can pay full benefits only until the fourth quarter of 2032, according to the 2026 Social Security and Medicare Boards of Trustees report. That’s one quarter earlier than the 2025 report projected.
After that, incoming revenue would cover about 78% of scheduled retirement benefits, an across-the-board cut of roughly 22%.
One quarter sounds minor. But the Social Security Administration’s chief actuary had already estimated that one piece of legislation, the One Big Beautiful Bill Act, enacted July 4, 2025, would by itself move the retirement fund’s depletion date by exactly that much.
How a tax break reaches the trust fund
The law added a temporary extra deduction for taxpayers over 65. It also made certain lower income tax rates and a larger standard deduction permanent.
Part of the income tax collected on Social Security benefits flows back to the trust funds, so lower taxable income means less money returning.
The trustees put it plainly: The retirement and disability trust funds “will receive lower levels of revenue in the future from income taxation of Social Security benefits.”
The chief actuary’s Aug. 5, 2025, letter put numbers on it. Over 2025 through 2034, the law adds a $168.6 billion net increase in program cost.
The retirement fund’s depletion date moved from the first quarter of 2033 to the fourth quarter of 2032, and the program’s 75-year shortfall widened from 3.82% of taxable payroll, the wages subject to Social Security tax, to 3.98%.
One cause among several
The trustees listed the law as one of three main reasons the long-range outlook worsened.
The Committee for a Responsible Federal Budget’s breakdown shows how the pieces compare. The 75-year deficit grew from 3.82% to 4.42% of payroll. Lower fertility assumptions account for 0.35 percentage points of the slide and lower immigration for 0.21.
The law accounts for 0.16, roughly a quarter of the total deterioration. Stronger economic assumptions offset 0.10.
The combined retirement and disability funds are still projected to run out in the third quarter of 2034, unchanged from last year. In that scenario, income would cover 83% of scheduled benefits. The disability fund alone is not projected to run out.
What 22% looks like on a check
On a $2,000 monthly retirement benefit, a 22% cut would be $440 a month, or $5,280 a year. That is an illustration, not a forecast of anyone’s benefit. The projection assumes Congress does nothing, and lawmakers have changed Social Security’s finances before when deadlines closed in.
A cut that applies to every benefit also undercuts a popular instinct to grab benefits early to beat it. Claiming before full retirement age, which is 67 for anyone born in 1960 or later, can trigger earnings limits for people still working and sets a permanently smaller base for any cut to be taken from.
Planning around a date Congress can still move
The benefit estimates on a my Social Security account assume full payment. Running a budget at 78% of that figure shows how much room a household has. That matters most for people whose plans were built on an average life expectancy rather than a long one, since a cut would last the rest of their lives.
Savers with roughly $100,000 or more in investable assets who would like a second set of eyes on how a 78% scenario changes their withdrawals can get matched with a financial advisor through Advisor.com.
The trustees will update the projections in their next annual report. Until then, 78% is the number their own math uses.
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