Newly Retiring Couples Could Lose $16,900 in Social Security Starting in 2033

When making a retirement plan, most people assume that they'll collect the promised amount of Social Security. After all, Social Security benefits are earned benefits, and workers have been paying into the system for their whole careers. Not getting the full benefits owed could be devastating.

Unfortunately, retirees are looking at a benefit cut that could cause financial disaster. And this could happen as soon as 2033.

The Social Security Trustees and other experts have been warning about this looming retirement crisis for a long time, but a new analysis shows just how devastating the cuts could become. Here's how much seniors stand to lose, along with details on why this is happening and what might be done about it.

The news isn't good for current and future retirees

Recently, the Committee for a Responsible Federal Budget took a close look at the state of Social Security's finances, and the news was not good.

According to the Committee's analysis, the reserves in the Old-Age and Survivors Insurance (OASI) Trust Fund are expected to be depleted in late 2032. This is based on the Social Security Trustees' report, which was published in June of 2026. When this happens, Social Security will only be able to pay benefits from revenue it's collecting.

The result: An automatic 22% benefit cut would become necessary to ensure that the costs of the Social Security program don't exceed its revenues.

As the Committee for a Responsible Federal Budget explains, seniors who are 61 today are going to reach their full retirement age at that time, while the youngest retirees in 2026 (those who retired at 62) are going to turn 68. Those retirees are going to be hit hard.

How much do retirees stand to lose?

According to an analysis done by the Committee for a Responsible Federal Budget, the amount retirees could lose when automatic benefit cuts happen is going to be very substantial.

Specifically, a newly retired dual-earning couple is expected to lose $16,900 in annual benefits starting in 2033 after the trust fund has become insolvent.

And, as if that news isn't bad enough, the Medicare Hospital Trust Fund is also expected to become insolvent, resulting in an 11% benefit cut and putting their access to health care at risk.

Why is this benefit cut happening?

The reason for the impending future benefit cut is simple. Social Security isn't able to borrow to fund the retirement program. It must pay benefits out of revenue collected, or from the trust fund. But the assets in the trust fund are disappearing too fast.

As the Bipartisan Policy Center explains, the big issue is that there are too few current workers paying too little in Social Security taxes to keep the system sustainable. While there were five workers paying Social Security for each retirement beneficiary in 1960, there were just 2.9 workers per retiree in 2026.

This major change is driven by:

• An aging population: There are too many retirees relative to workers because the population is getting older. There aren't as many children being born, and people are living longer. These demographic changes have meant that overall there are too many older people being supported by too few younger people.
• Payroll taxes are charged on a shrinking share of earnings. Only 83% of wages are subject to Social Security tax today. That's because there's a cap on the amount of income subject to tax. As wages for higher-income Americans have increased faster than the taxable maximum, the percentage of total income subject to Social Security tax has declined.

Unfortunately, these trends are difficult or impossible to reverse, especially the aging population.

What are the options to save Social Security?

A 22% benefit cut and the loss of $16,900 in annual benefits is unsustainable for most seniors. But the big question is, what should be done?

Since Social Security doesn't have enough income to pay all of the promised benefits, it either needs to increase revenue or reduce the amount it's paying out. Possible ways to do that include:

• Eliminating or increasing the cap on the wages subject to Social Security tax. Currently, workers who make under the wage base limit are charged Social Security tax on all their wages (and all their wages count when benefits are calculated). Income above the wage base limit ($184,500 in 2026) isn't subject to Social Security tax or counted in benefit calculations. Some proposals suggest this cap should be raised or eliminated, so all workers pay tax on their full wages.
• Increasing the payroll tax. Workers across the board could be asked to pay higher Social Security taxes to fund the program.
• Increasing full retirement age. If full retirement age was moved later, retirees would have to wait longer to claim benefits (saving Social Security money) or accept a benefits cut for an early claim (which also saves Social Security money).
• Changing the way COLAs are calculated. Periodic cost of living adjustments give seniors raises most years. The COLA formula could change to result in those raises being lower. One possible suggestion in the past involved switching the consumer price index that COLAs are based on to something called "chained CPI," which is a price index that works off the premise that people change spending habits when inflation surges.

Any of these approaches could be unpopular with certain groups, including people who don't want to pay more taxes and people who don't want any cuts to benefits.

Bottom line

Ignoring the problems with Social Security could be one of the most serious financial mistakes current and future retirees make. You must understand that benefits are going to face major automatic cuts if nothing changes, and you should work to shore up your savings accordingly if you want the secure retirement you deserve.

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