A report indicates that Americans may face a reduction of about 25% in Social Security benefits over the next six years due to dwindling funds. This finding, released on June 9th by the Social Security Board, comes much sooner than the anticipated 2025 timeline.
For some time now, experts and trustees have expressed concerns about the instability of Social Security’s finances. Factors such as an aging population, declining birth rates, and rising income inequality have led the program to pay out more in benefits than it receives in tax contributions.
“This program is disbursing more than it earns, creating a funding gap that’s not sustainable,” said Shai Akabas, who is the vice president for economic policy at the Bipartisan Policy Center.
The trustees explained that the shortfall appeared earlier than expected, partially due to tax and spending cuts implemented during President Donald Trump’s tenure, along with tighter immigration laws.
Experts shared with PBS News that as Social Security’s financial challenges worsen, senators elected in the upcoming November midterm elections will likely need to address changes to the program.
“When we vote, we are choosing leaders who will shape the future of this program,” remarked Kathleen Romig, a senior fellow at the Center on Budget and Policy Priorities.
It’s been over four decades since substantial changes were made to Social Security. Back in 1983, Congress passed legislation during a crisis that incrementally raised the retirement age for individuals born after 1960 from 65 to 67 years.
“We can’t keep using a system that was established almost a century ago and hasn’t been updated significantly,” Akabas added. “Reforming our economic system is essential for its viability moving forward.”
So, what should you know about Social Security’s future?
Why are Social Security funds running out faster than expected?
Each year, the Social Security Board of Directors provides Congress with updates regarding the program’s financial condition. To ensure stability, Social Security needs adequate funds to fulfill benefits and administrative costs.
In 2025, the retirement fund generated $1.2 billion, largely from payroll taxes contributed by 185 million workers. However, the program, which supports more than 56 million beneficiaries, spent $1.4 billion—resulting in a deficit.
For many years, the Social Security Trust Fund has subsidized expenses that tax revenues could not cover. Unfortunately, its reserves are depleting. According to the 2026 report, that depletion is now projected for late 2032, with only enough resources to cover 78% of benefits by then.
The report anticipated this shift due to three main factors:
- Birth Rate: The Trustees revised estimates regarding birth rates. With fewer births, there will be a decrease in future workers contributing to Social Security as the population ages.
- Immigration Trends: Policies from President Trump have lowered the estimated number of immigrants, both legal and undocumented. Many of these individuals contribute taxes but aren’t eligible for benefits, thus supporting the program financially more effectively.
- Tax Bill Impact: Although President Trump’s tax legislation did not entirely remove taxes on benefits as promised, it did reduce taxes for many beneficiaries, resulting in decreased revenue for the Social Security trust fund.
Potential Effects of Strict Immigration Policies
According to Nancy Altman, president of the advocacy group Social Security Works, forthcoming reports may further push back deadlines related to Social Security payments due to continuing rigid immigration policies.
The existing report is grounded in 2025 data, prior to the onset of the US conflict with Iran. Adjustments for Social Security benefits will occur based on living costs, which means payouts may rise alongside inflation rates.
Another year of strict immigration could continue to influence Social Security disbursements. Romig pointed out that while trustees assume immigration will rebound after Trump, it’s not guaranteed.
This assumption fails to acknowledge that persistent strict immigration policies could lead to severe repercussions for Social Security, she noted.
What can be done to avert cuts to Social Security benefits?
Various economic policy organizations have suggested changes that could stave off a crisis within Social Security. While some bills have been introduced, Congress has yet to act. Implementing any solution will require bipartisan support to prevent Senate standoffs.
“The policy itself is rather straightforward,” Altman stated. “It’s the politics that complicate things.”
Akabas mentioned that the current political environment makes it nearly impossible for the two major parties to collaborate effectively on a plan to safeguard Social Security’s main trust fund.
Congress has three primary methods at its disposal to address Social Security funding issues, but none of them have broad bipartisan backing: either cut benefits, increase revenues, or a combination of both.
To reduce payouts, Congress could lower benefit amounts or raise the retirement age. On the flip side, it could also increase taxes or lift the income cap for Social Security taxation—currently set at $184,500 for wage income.
Experts indicate that rising wealth inequality further exacerbates the Social Security dilemma. Akabas emphasized the importance of reforming how the program can tax income, as current legislation limits its capacity.
However, merely implementing these changes won’t instantly halt benefit reductions.
“As reforms are made, policymakers must acknowledge that even with adjustments, the fund is likely to encounter hardships around 2032,” Akabas added.
He cautioned that many of these alterations will require time to implement fully. Until then, Congress may need to authorize borrowing to meet beneficiary payments.
