If no new funding plan is put in place soon, people who rely on Social Security could lose a big chunk of their retirement money within the next seven years. A new report says that a typical couple retiring in 2033 might lose about $18,000 a year in benefits. For couples with only one income, that loss would be around $13,600 a year.
This matters because millions of Americans depend on Social Security to help pay their bills after they stop working. The money for these benefits comes from payroll taxes and government savings accounts. But those savings are running low. If nothing changes, by 2034 the Social Security program won’t have enough in reserve to pay full benefits. Instead, it will have to rely only on incoming payroll taxes. That means every retiree could see about a 21% cut in their monthly payments unless Congress acts to fix it.
How much people lose will depend on how much they earned during their working years and whether they were single or part of a couple. Couples with lower incomes will lose less in dollar terms—about $11,000 a year—but that’s still a big hit compared to what they earn overall. Wealthier couples could lose nearly $24,000 a year.
These estimates are even worse than earlier predictions. That’s because of a new law, the One Big Beautiful Bill Act (OBBBA), which lowers some taxes and increases deductions for seniors. While the law makes it so most retirees won’t pay income tax on their Social Security benefits anymore, it also means less money is coming into the Social Security system, making the funding problem even worse.
Back in the 1980s, Social Security faced a similar crisis. At that time, Congress stepped in and made changes like raising payroll taxes and gradually increasing the retirement age. Some of those ideas might be needed again.
The organization behind this new report says politicians who promise not to touch Social Security are really just avoiding the hard truth. If no changes are made, retirees in 2032 and beyond will face big benefit cuts. The report urges lawmakers to be honest and take action now to save the program for future generations.
There are some ideas already being discussed in Congress. One plan would tax income over $400,000 to help fund Social Security. Another bipartisan proposal suggests the government should create a $1.5 trillion investment fund. The goal would be to grow the money by investing in stocks and bonds, and then use the earnings to support Social Security over the long run.
Even though these proposed cuts haven’t happened yet, this issue is serious and affects nearly everyone. If nothing is done, retirees in the near future could have a lot less money to live on, which would hit low-income and middle-income families especially hard.
