New Report Puts Social Security Trust Fund Depletion Later Than Official Projections

The millions of Americans who depend on Social Security senior benefits may have a bit more time before the Social Security trust fund runs out. A new Penn Wharton Budget Model (PWBM) projects that the trust fund may last a few months longer than the depletion date projected in the Social Security trustees report. Either way, Congress needs to act to prevent automatic benefits cuts that could leave millions of retirees with less money each month.

From projected depletion dates to what might happen if the funds run out, here's what you should know if you or a loved one receives Social Security benefits.

The new analysis and new projection for Social Security

According to the new PWBM analysis, the trust fund that helps the Social Security program pay retirement benefits may be depleted in February 2033. The projected date is a few months later than the date predicted by the June 9 Social Security trustees report, which puts the trust fund runout during the fourth quarter of 2032.

The picture is a bit brighter if the trust fund is combined with the disability insurance trust fund, which may help extend the depletion date. The PWBM analysis projects depletion in February 2035 in such a scenario, while the Social Security trustees report projects depletion in the third quarter of 2034.

Why the shifting projections matter

While the estimated depletion dates are relatively close together, the difference in the projections is notable because the PWBM has historically projected earlier depletion dates than the trustees fund. The gap between the projections has closed and even reversed, but both projections still highlight the importance of legislative action to protect the Social Security program.

Why projections keep changing

Last year, both the PWBM and trustees report projections placed the depletion date in 2033, but this year, both projections moved that projected date up. Previous estimates put the depletion date for the combined trust funds in the mid-2030s, but now that's been moved up, too.

Changes in tax law are partially behind the changing projections. The 2025 One Big Beautiful Bill Act lowered tax liability for Social Security beneficiaries, meaning the trust fund receives less revenue from income taxes on Social Security benefits.

The aging population has also strained the trust fund, as the population receiving benefits has grown. In 1960, five workers paid Social Security taxes per one Social Security beneficiary, but by 2026, that ratio dropped to 2.9 workers to one beneficiary.

What trust fund depletion would mean

If the Social Security trust fund became depleted, the program wouldn't go bankrupt, since payroll taxes would continue to help fund the program, but wouldn't cover the full benefit amounts. Benefit payments wouldn't immediately stop, but they would be reduced. Current law prohibits the Social Security program from paying out more in benefits than it receives in revenue after the trust fund is depleted, so a 24% benefits cut would immediately be implemented.

A 24% cut in benefits would range from a loss of $459 to $556 in benefits each month, depending on the state in which a beneficiary lives. Nationally, the cut would average about $500, which is greater than what average retired households spend on groceries in a month, according to the Committee for a Responsible Budget. Such a cut could be financially devastating, especially for households that have limited or no other sources of income.

What might happen if the trust fund issue isn't addressed

The initial benefit reductions are just a starting point unless Congress identifies a solution to the trust fund insolvency. PWBM estimates that if the trust funds were combined, 86% of scheduled benefits could be paid when the funds were depleted. However, that figure would fall to 60% by 2100, potentially leaving Social Security beneficiaries with another, deeper benefits cut.

The trustees project that 83% of benefits would be payable at the depletion of the combined funds. By 2100, that could drop to 65% of benefits.

Who might be affected

The long-term impact of the trust fund's depletion could directly affect about one-fifth of the population. As of April 2025, 73.9 million people received Social Security benefits. Those beneficiaries included 52.6 million retired workers and 2.7 million spouses and children of retired workers.

Bottom line

All of these projections assume that Congress takes no action, and there's lots of conversation surrounding the topics of Social Security's pending insolvency. Both Democrats and Republicans have been suggesting potential solutions, such as increasing or eliminating the wage cap to boost income taxes, increasing the payroll tax rate, raising the full retirement age to claim Social Security, reducing benefits for individuals with higher incomes, and more. With the trust fund projected to run out as early as 2032, the window for reform continues to narrow, and the pressure on Congress to identify and implement a solution increases.

If Social Security is part of your retirement plan, it may be a good idea to talk with a financial advisor. A professional could help you review your plan, evaluate your budget in case your benefits should be reduced, and make sure that you're on track for retirement.