Retirement Social Security

Social Security Is Now Projected to Run Out of Money a Full Year Earlier - What Seniors Need to Know

Here's how a reduction in Social Security might impact your retirement plan.

By Paige Cerulli , Edited by Andrea Basse

Updated June 3, 2026

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Social Security benefits are likely a key component of your retirement plan, but the program's future is uncertain. With projections of Social Security insolvency as soon as 2032, benefit cuts are possible, meaning you may need to rethink your retirement planning.

Here's what to know about when Social Security may run out of money, how it might affect you, and the steps you may want to take now to prepare.

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Understanding Social Security insolvency

There's lots of talk of Social Security "running out of money," but that doesn't mean that benefits would stop entirely. Reserve Social Security funds may be depleted, but millions of Americans continue to pay into the program, generating funds. Since money is still coming into the program, it's likely that Social Security recipients are going to continue to receive benefits, but those benefits may be reduced.

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Projections for Social Security depletion

In 2025, the Social Security Board of Trustees released its annual report evaluating the financial status of Social Security. The report projected that the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) trust funds would become depleted in 2034. The funds are projected to run out a year earlier than 2024's projection of the funds running out in 2035.

Once the funds are depleted, 81% of Social Security benefits would still be payable.

The OASI trust fund is projected to become depleted earlier, in 2033, by 23%. At that time, 77% of benefits would be payable.

Newest projections for Social Security depletion

Since the Board of Trustees released those projections, the outlook has gotten worse. Karen Glenn, the Social Security Chief Actuary, projected in August 2025 that Trump's One Big Beautiful Bill Act may accelerate the depletion of the OASI and DI trust funds. According to Glenn's statement, these funds were originally projected to be depleted by the third quarter of 2034, but now may be depleted by the first quarter of 2034. The OASI trust fund's depletion date has been accelerated from the first quarter of 2033 to the fourth quarter of 2032.

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Why Social Security funds are being depleted

Several factors are causing the Social Security depletion timeline to keep moving up. The aging U.S. population has resulted in a surge of retirees, placing an increased financial burden on the workforce to fund Social Security benefits for those retirees with their contributions.

The Social Security Fairness Act, which was enacted in early 2025, issued $17 billion in benefits to beneficiaries whose benefits had been reduced because of the Windfall Elimination Provision or Government Pension Offset, further reducing Social Security funds.

The One Big Beautiful Bill Act created a tax deduction for seniors age 65 and up. Beginning with the 2025 tax year, the Act offered a deduction of up to $6,000 for single filers and $12,000 for married couples, which reduced the income tax revenue that flows back to Social Security funds.

Timing when you claim Social Security

Knowing that Social Security benefits may be reduced if the funds are depleted might impact your decision of when to begin claiming your benefits. While you have the option to claim benefits at age 62, doing so may reduce your monthly benefit by as much as 30% compared to the benefit you could receive at full retirement age. Waiting until full retirement age to claim means you may receive 100% of your benefit amount. And if you wait past your full retirement age, your benefit increases by about 8% per year until age 70.

Deciding when to claim depends on factors like your health, income needs, and anticipated lifespan. Claiming before 2033 or 2034 might help you receive larger benefit payments if those benefits may be reduced when the program's funds become depleted. But, there's always the chance that the government may intervene, preventing benefits from being reduced.

Stress-test your retirement plan

If Social Security funds are depleted, your benefits might be cut by about 20%, so now is the time to reevaluate your retirement plan to see if you could navigate such a cut. Calculate what your monthly retirement budget would be pre- and post-Social Security benefit cut. Could you live comfortably on the post-cut amount?

If your post-cut budget is too tight, you might want to explore options like delaying retirement a bit longer, doing some freelance or consulting work in retirement, re-evaluating your investments, or even downsizing your home so you could live more comfortably on a tighter budget.

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Bottom line

The idea of Social Security funds becoming depleted is frightening, but it doesn't mean that benefits are going to end, though they may be reduced. Congress has acted previously, such as when it intervened in 1983 to shore up the Social Security program. There's lots of conversation around Social Security currently, so watch for Congressional action that might change the picture before funds become depleted.

In the meantime, it's a good idea to consult with a financial planner and review your retirement plan to ensure you're prepared just in case Social Security benefits might be reduced.

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