New Projection Moves Up Shortfall for Social Security

Social Security's retirement trust fund now is projected to face a funding shortfall in 2032, a year earlier than last year's projections, according to a report released Tuesday. Medicare's hospital insurance trust fund will be unable to pay full benefits in 2033, the report says, which is unchanged from last year's estimate. Rising health care costs and government spending have contributed to the new projected depletion date that is less than 10 years from now, the AP reports. The looming challenge for the programs is a partial funding gap, not a collapse. Even after trust fund depletion, the system will continue issuing benefits, albeit at reduced amounts.

Last year, Medicare's hospital insurance trust fund go-broke date was pushed to 2033 from 2036 the year before that, according to the report from the programs' trustees. Meanwhile, Social Security's combined trust funds—which cover old age and disability recipients—will be unable to pay full benefits beginning in 2034, unchanged from the 2025 report. After that, incoming revenue would cover about 83% of scheduled benefits. Social Security Commissioner Frank Bisignano said the Trump administration is "committed to protecting and strengthening Social Security" and to "eliminating waste, fraud, abuse and ensuring program integrity."

The new funding shortfall is mainly the result of lower projected birth rates, reduced immigration, and reduced trust fund revenue due to the costs of Republicans' massive tax and spending bill that President Trump signed into law last summer, according to the report. Nancy Altman, president of the Social Security Works advocacy group, said the latest report takes "Donald Trump's second-term policies into account: A tax bill that largely benefited the wealthy, economy-wrecking tariffs, a needless war with Iran, and hostility to immigrants. All of these have reduced the amount of money going into Social Security, weakening the system's finances." AARP CEO Myechia Minter-Jordan said in a statement that the latest numbers "should be a wake-up call. Congress needs to act."