The future of Social Security—a program that tens of millions of Americans rely on for retirement income—may be approaching a critical juncture. According to the latest annual report from the Social Security Board of Trustees, the trust fund that supports retirement benefits is projected to be depleted by 2033. If no changes are made by then, Social Security benefits will run out in 2033, and the program will only be able to pay 77% of scheduled benefits from incoming payroll tax revenue.
This is a slight shift from last year’s projection, which had estimated depletion in 2034. The new timeline reflects updated assumptions, including the impact of the Social Security Fairness Act, which went into effect in 2025. This law enhanced benefits for certain public pensioners and, as anticipated, moved the trust fund’s projected depletion date closer.
In the meantime, Social Security still has enough income—primarily from payroll taxes—to cover scheduled benefits and administrative costs until the projected depletion date. Workers currently contribute 6.2% of their income to Social Security, while employers match that amount. Self-employed individuals pay the full 12.4% themselves. For Medicare, the contribution is 1.45% for both workers and employers, or 2.9% for self-employed individuals.
The companion Medicare Hospital Insurance trust fund, which supports services under Medicare Part A, is also facing funding shortfalls. The Medicare trustees’ report shows that this fund will be able to pay full benefits until 2033, three years earlier than projected in the previous year’s report. After that, 89% of scheduled benefits would be payable.
With approximately 70 million Americans receiving Social Security benefits and 185 million workers paying into the system through payroll taxes, the stakes are high. Social Security Administration Commissioner Frank Bisignano emphasized the importance of maintaining the program’s solvency, noting that the system plays a vital role in the financial well-being of millions of Americans.
To preserve the future of Social Security and Medicare, Congress faces tough decisions. Solutions may involve raising payroll taxes, reducing benefits, or adopting a combination of both to ensure the trust funds can continue to meet their obligations for future generations.
As the 2033 deadline approaches, expect the conversation around entitlement reform to become even more prominent in Washington—and in households across the country.