Social Security’s primary trust fund may be drained a year sooner than expected, according to a new report from the Congressional Budget Office, an agency that provides budgetary and economic analysis to Congress.
The Old-Age and Survivors Insurance (OASI) trust fund is one of the two funds used to distribute Social Security benefits. It’s now projected to be depleted in 2032, according to the CBO’s 2026-2036 outlook published in February. Last year, the agency estimated the fund would run dry in 2033.
Here’s a closer look at the latest Social Security funding projections.
With major reforms to Social Security in the 1980s, Congress increased payroll taxes and gradually raised the retirement age in an effort to prepare for the retirement of the baby boom generation. The goal was to build up large trust fund reserves in advance to be drawn down later. Between roughly 1984 and 2009, Social Security collected more in payroll taxes than it paid out in benefits. These surpluses were credited to the OASI trust fund.
In any year in which payroll tax revenue is insufficient, Social Security uses OASI funds to cover the shortfall in benefit payments. This process began around 2010. Now, leaders within the Social Security Administration are warning of the approaching exhaustion of these funds.
“As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues,” the Social Security and Medicare Boards of Trustees warn in a message to the public regarding the 2025 annual reports.
The decline of trust fund reserves is just one of several factors contributing to Social Security’s rapid insolvency. The Committee for a Responsible Federal Budget (CRFB) identifies others, which include:
The CRFB says the more than 70 million current Social Security recipients could see an average 28% cut to monthly retirement and survivor benefits if the OASI fund is depleted, USA TODAY reports. Payroll taxes would continue to cover roughly 75-80% of scheduled benefits. In a previous estimate, the agency projected that a couple who retired just after insolvency would see a cut of $18,400 in annual benefits.
However, the latest Social Security depletion prediction is just that — a prediction. Although current statistics indicate reserves will be exhausted in 2032, there are still possible interventions to change that. While factors like demographic shifts and life expectancy are inevitable, the CRFB notes that legislative action has contributed to changes in projections from 2025 to 2026.
“Social Security has been on a path towards insolvency for some time — but over the past year, politicians have made its financial condition even worse,” the CRFB says in its report, referring to the Social Security Fairness Act and One Big Beautiful Bill Act. “As a result of these laws combined with various economic, demographic, and technical revisions, and — most significantly — years of neglect from policymakers unwilling to rescue Social Security, the program’s 75-year shortfall has grown.”
The Social Security and Medicare Boards of Trustees suggest legislative action could slow insolvency rather than accelerate it.
“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls,” a message from the Social Security and Medicare Boards of Trustees states. “Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”