What happens when the Social Security trust fund runs out?

Once the trust fund surplus runs out, Social Security will only be able to pay benefits from current payroll tax collections. This would cover approximately 74% of scheduled benefits. Without Congressional action, benefits could be reduced by about 26%.

Will Social Security be there when I retire?

Yes, Social Security will almost certainly exist when you retire. The program is extremely popular and has strong political support. While changes may be needed to ensure full solvency, the program has been reformed before (in 1983) and will likely be reformed again rather than eliminated.

Will Social Security Run Out of Money?

Q: Will Social Security run out of money?

The Social Security trust fund is projected to be depleted by 2034, but Social Security will not disappear. Even after the trust fund runs out, payroll taxes will continue to fund about 74% of scheduled benefits. Benefits would only stop entirely if Congress eliminated the payroll tax.

Q: How could Congress fix Social Security?

Congress has several options: increase the payroll tax rate, raise the retirement age, lift the earnings cap on taxable wages, adjust benefit formulas, change cost-of-living adjustments, or some combination of these approaches. Most experts expect a bipartisan solution before benefits would be cut.

Published: 8/11/2023

The Short Answer

Social Security will not disappear — even if the trust fund is depleted, payroll taxes will continue funding benefits
Current projection: 2034 — the trust fund surplus is expected to run out
Worst case: 26% reduction — if nothing changes, benefits could be reduced by about 26%
Congress has options — multiple legislative solutions exist to prevent or minimize cuts

Is Social Security Running Out of Money?

You may have heard that the Social Security program is running out of money. This is technically true, but only part of the story. Social Security is both paying out money to retirees and also collecting money from workers at the same time. Over its 80-year history, the program has collected more money than it has paid out. The current surplus is $3 trillion. However, in recent years the program is paying out more than it is collecting, and so the fund is shrinking. Current estimates are that the fund will run out in 2034.

What Happens When the Trust Fund Is Depleted?

Once the surplus runs out, the program will still be collecting money, and those collections will cover all but 26% of the current payments. So, if nothing changes by 2034, the calculated benefit may be reduced by 26%, but the payments will still continue. This is probably the "worst case" scenario.

More information: The Future Financial Status of the Social Security Program

How Could Congress Fix Social Security?

There are multiple mechanisms by which Congress could conceivably fix the Social Security deficit, which would have less of an impact than the worst case scenario. What will ultimately happen is unknown. Some of the ideas that have been proposed include:

Increase the payroll tax which funds the program
Raise the ages at which benefits begin
Change the method by which inflation adjustments are made to a more slowly rising value
Change the bend points or ratios for the PIA formula
Reduce the number of years from which benefits are calculated
Reduce the spousal benefit
Invest a percentage of the fund in equities

Will Social Security Go Away Completely?

It is unlikely that the program will go away entirely, due to its popularity. What approach will be taken is unknown — it is up to Congress to decide how to address the issue. It is likely that some combination of the above solutions will be used.

Regardless of what happens with the trust fund, understanding your current benefits is still valuable. Use the SSA.tools calculator to see your projected benefits based on your actual earnings record.

Related Guides

Primary Insurance Amount (PIA) — How your benefit amount is calculated using the bendpoint formula
Earnings Cap — The income limit that funds Social Security through payroll taxes
Work Credits — The 40 credits you need to qualify for retirement benefits
Maximum Benefit — The highest monthly benefit you could receive today

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