Key Points
A large share of retirees depends on Social Security for a substantial part of their income. However, the program’s OASI trust fund is projected to run dry as early as 2032, according to the latest Trustees Report, which could trigger benefit reductions.
Without reform, once the trust fund is exhausted, the program will be unable to pay the full scheduled benefits, leading to across‑the‑board cuts. Couples who rely on two Social Security payments would be especially affected, potentially losing a large share of their household income.
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How much will the average couple lose if Social Security benefit cuts happen?
The Committee for a Responsible Federal Budget estimates that a newly retired dual‑earning couple could see their annual benefits drop by roughly $16,900 beginning in 2033 if the projected cuts are enacted.
This estimate stems from the trustees’ projection that, after the trust fund is depleted in Q4 2032, the program will be able to cover only about 78% of the benefits it has promised.
The impact will differ by earnings level. A single‑income couple could lose around $12,700 per year, whereas a high‑earning dual‑income pair might see losses near $22,300 annually. In either case, the reduction amounts to roughly 22% of a typical monthly benefit.
There are fixes, but lawmakers need to take action
Because the trust fund is not expected to be exhausted for several years, the cuts are not imminent, giving policymakers a window to act. However, each month of delay worsens the shortfall, as ongoing benefit payments continue to draw down reserves.
The longer Congress postpones action, the steeper any required tax hike or benefit reduction will become. Options such as raising the full retirement age, increasing the payroll tax, or applying the tax to a larger share of earnings have been discussed, but each carries drawbacks and encounters political resistance, complicating efforts to strengthen the program.
Nonetheless, workers and future retirees deserve certainty in their retirement planning, so legislators should address the shortfall promptly—deep benefit cuts would be extremely difficult for many senior households to absorb.