$16,500 Cut Awaits Retirees if Social Security Isn't Reformed

Former President Donald Trump and Vice President Kamala Harris have both said they would “protect” the Social Security program. However, neither has put forward a plan to meaningfully do so and President Trump has proposed changes that would worsen the program’s finances.

The Social Security Old-Age and Survivors Insurance (OASI) trust fund is projected to be depleted by 2033, at which point the law calls for a 21 percent across-the-board benefit reduction. We estimate this would represent a $16,500 cut in annual benefits for a typical dual-income couple retiring at the time of trust fund depletion.

This analysis is largely an update of our 2023 piece on the same topic.

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The Social Security program is currently paying out more in benefits than it collects in payroll tax and other revenue, and it is drawing down its reserves to cover the remaining cost of benefits. The program’s Trustees project that the OASI trust fund – which funds retirement benefits – will deplete its reserves in the fourth quarter of 2033. That is when today’s 58-year-olds reach the normal retirement age and today’s youngest retirees turn 71.

Once the reserves are depleted, the law limits benefits to incoming revenue, which essentially mandates a 21 percent across-the-board benefit cut for the program’s 70 million beneficiaries.

While Vice President Harris has promised to “protect Social Security” and former President Trump has pledged to “fight for and protect Social Security,” neither candidate has offered a comprehensive plan to address the impending solvency challenge. In fact, some of President Trump’s proposals – especially to end taxation of Social Security benefits – would significantly worsen these challenges.¹

For the first year following insolvency, assuming current law, we estimate inaction would lead to a $16,500 nominal benefit cut for a typical dual-income couple who retired at the time of trust fund depletion, or a $12,400 nominal reduction for a typical single-income couple.

The actual size of the benefit cut would vary across retirees depending on their age, work history, and lifetime incomes. For example, a low-income, dual-income couple retiring in 2033 – as defined by the Social Security Trustees – would see a $10,000 cut to their benefits while a high-income, dual-income couple would see a cut of $21,800. Although the cut for a low-income couple would be smaller and reflect a 21 percent reduction in their benefits, the cut would be a larger share of their income.

While retirees will experience a 21 percent across-the-board cut to their benefits in 2033, this automatic cut will grow over time – to 31 percent by 2098 – due to the widening gap between the program’s benefits and revenues.

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¹ While President Trump has also called for increasing drilling of oil and natural gas to help secure Social Security, we have shown this won’t meaningfully improve solvency. Separately, President Trump has called for “unleashing a new Economic Boom” to help secure Social Security, but any improvement in economic growth from his agenda is likely to improve solvency only modestly. Other proposals from President Trump – including to remove taxes on tips, increase deportation, and impose large tariffs – could worsen solvency.