Couples Could See Social Security Drop $16,900 a Year - Here's When

Chances are very good that you've heard dire warnings about Social Security benefit cuts coming soon.

These warnings aren't just a nasty rumor. The Social Security Trustees released a report in June and sounded the alarm that the trust fund for the Old-Age and Survivors Insurance (OASI) program is expected to run out in the fourth quarter of 2032.

If the trust fund does get depleted, the trustees warned that benefit cuts would be inevitable. Social Security can't pay benefits from the general fund. It could pay only from the revenue it collects. Since there's not enough revenue, an automatic 22% benefit cut would happen when the trust fund runs dry in 2032.

Obviously, that sounds like enough to derail your retirement plans, but what exactly does it mean for the typical retiree? Research suggests an answer, and it's not a good one for seniors. The Committee for a Responsible Federal Budget estimates that a newly retiring dual-earning couple in 2033 would lose around $16,900 in annual benefits.

Here's what you need to know about these huge cuts that are potentially coming, as well as some proposed solutions.

When exactly is the trust fund going to be depleted?

Unfortunately, the deadline for automatic Social Security benefit cuts is approaching sooner than anyone had hoped.

As mentioned above, the June 2026 report from the trustees warns that the OASI trust fund is expected to be gone in 2032, and retirees would see 22% of their benefits disappear with it.

There is a way to buy a little time, though. There's another trust fund, the Disability Insurance Trust Fund, which most experts believe would be combined with the OASI fund if the OASI fund were to run dry. The combined fund would still be depleted in 2034, though. At that time, there would be sufficient funds to cover 83% of scheduled benefits. So, an automatic 17% cut to benefits would be necessary.

The two funds can't be combined under current law, but that could change. So, that means one of two things is inevitable, but we don't know for sure which one:

• The OASI trust fund would be gone in 2032, and a 22% benefit cut would happen automatically
• The combined OASI and DI trust fund would be gone in 2034, and a 17% benefit cut would happen automatically

Social Security is on track for one of these outcomes if nothing changes.

Benefit cuts could be a big problem for retirees

Social Security benefit cuts are likely to be a big problem for many seniors if they happen. That newly retired couple mentioned above would lose around $16,900 each year, and many retirees would lose their financial security entirely.

In fact, the Senior Citizens League found that 27% of seniors depend on Social Security to provide all of their income, while another 20% rely on benefits for between 76% and 99% of their income. That's not great news even under the current rules, since the average benefit in 2026 was just $2,071, and benefits typically replace only 40% of pre-retirement income when experts say about 70% to 80% is needed.

If you're relying on your benefit as a sole or major income source, you're already living on a small fraction of what you earned before. Losing another 22% off the top of that could be truly devastating. In fact, 61% of Social Security recipients said that missing even half a payment would leave them unable to survive financially.

The gap will become worse and harder to fix

Sadly, as the population ages, there could likely be fewer workers to pay for all the promised benefits for retirees who are counting on Social Security. There simply won't be enough workers to allow Social Security to continue collecting enough revenue to make the full payments promised.

How big could the shortfall be? Unless something changes, the Committee for a Responsible Federal Budget projects that annual benefit cuts would reach 35% by the end of the century.

Unfortunately, the deeper into the hole Social Security goes, the more costly it becomes to put enough money back into the program to make it financially stable.

Can Congress find a solution?

No senior wants to take a huge benefit cut, and no politician wants to be the one who makes them do that. So, Congress is likely to drag its feet and kick the can down the road, as it's done the last several times Social Security reforms have been attempted.

Still, there are proposed fixes including:

Raising the payroll tax rate:

Workers pay a 6.2% Social Security tax on income up to $184,500. Employers pay the same on behalf of workers, while self-employed individuals pay 12.4%, as they cover the employer's portion as well. Raising the rate higher could produce more revenue to fund Social Security, helping to prevent benefit cuts.

Eliminating the cap on the income subject to payroll tax

Currently, workers who make above $184,500 don't pay Social Security tax on the remainder of their income or get credit for it when benefits are calculated. There have been various proposals to lift this cap, often for the highest earners with income above $400,000.

Slowing cost-of-living adjustments

Changes could also be made to how Social Security cost-of-living adjustments are calculated. Congress could freeze raises temporarily, which was on the table in 1983 reforms, or it could switch the COLA formula to "chained CPI." CPI measures changes to a basket of goods and services, while chained CPI does the same but assumes you adjust behavior when prices go up, so, for example, you might substitute chicken for pork if pork is too costly.

Raising the full retirement age

This was done in the 1983 reforms, and it's possible it could happen again. This would mean people either need to delay longer to claim Social Security, or they would get hit with early-filing penalties.

It's unclear if these, or other solutions, could become part of a compromise plan to shore up Social Security.

Bottom line

Not preparing for potential future Social Security benefit cuts is one of the biggest financial mistakes you could make. Many congressional solutions would end up being a de facto benefit cut, and an automatic cut is also possible given the rapidly approaching date when the trust fund runs dry.

You should save, invest, and potentially consider talking with your representatives about what you feel is the right fix for Social Security so you could maximize the income coming from multiple sources and achieve the financial security you deserve.

You May Also Like

Almost 80% of Americans Fear a Retirement Age Increase — Here’s the Real Reason Why

By FinanceBuzz Editors

10 Smart Money Moves to Retire

By FinanceBuzz Editors

The Easiest Way to Diversify Your Investment Portfolio With Fine Art

By FinanceBuzz Editors

7 Brilliant Ways to Build Wealth After 40

By FinanceBuzz Editors

5 Ways Seniors Are Throwing Away Money

By FinanceBuzz Editors

Best High-Yield Savings Accounts of August 2026

By FinanceBuzz Editors

Save Money and Get Huge Discounts on Everyday Purchases

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal

Become a member now!

---

Subscribe Today

Unlock the Best Banking Deals and Bonuses

From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.

or

SEE TOP BANKING OFFERS →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms