‘No vote, no warning, just plain math’: Social Security is six years from an automatic 22% cut—and most Americans have no idea

More than one in five Americans don’t know that their Social Security checks could be cut by roughly 20% in about six years, according to a recent TIAA survey on Social Security. The program’s retirement trust fund, which pays benefits to retirees and survivors, is projected to run out of reserves in the fourth quarter of 2032, according to the 2026 Social Security Trustees Report. After that, incoming payroll taxes would cover only 78% of scheduled benefits. The resulting 22% cut would apply across the board, including to people already collecting. “Insolvency is a slightly misleading word for what the Trustees are projecting,” says Martin Mulyadi, YHB Endowed Chair in Accounting and Professor of Accounting at Shenandoah University. Payroll taxes keep flowing after 2032, he notes: “Social Security is not running out of money in 2032. It is running out of savings.” The stakes are large. Social Security pays monthly benefits to more than 71 million people, and it provides the majority of income for 43% of seniors, according to AARP. The Committee for a Responsible Federal Budget (CRFB) estimates that a 22% cut would cost a typical dual-income couple retiring in 2033 about $16,900 a year. CRFB has warned that the program is “on a collision course toward insolvency,” and Fortune has reported that its finances haven’t looked this bad since 1983. The alarm grew louder after the trustees confirmed the 22% cut in June. “America has a 25 trillion dollar problem,” says Michael Liner, a disability attorney and founder of Liner Legal, a law firm that specializes in Social Security disability benefits. “The gap between what Social Security has promised and what it can actually afford to pay.” The trustees now put that 75-year gap even higher, at $29.3 trillion in present value, up from $25.1 trillion in last year’s report. If nothing changes, Liner says, the cut arrives automatically: “No vote, no warning, just plain math.” For many retirees, he adds, it will be “the difference between getting by or not.” Why the retirement fund is running dry Social Security is funded mainly by payroll taxes. For decades, those taxes exceeded what the program paid out, and the surplus built up reserves in two trust funds: the Old-Age and Survivors Insurance (OASI) fund for retirees and survivors, and the Disability Insurance (DI) fund. That changed in 2021, when the retirement fund’s costs began exceeding its total income, according to the Congressional Research Service. Reserves have been covering the difference ever since. “In 2025, Social Security took in about $1.45 trillion and paid out about $1.61 trillion, and reserves covered the gap,” Mulyadi says. The disability fund is in better shape; the trustees don’t project it running dry at any point in the next 75 years. If Congress legally merged the two funds, combined reserves would last until 2034 and then cover 83% of benefits, according to CRFB. That would require a change in law, and it wouldn’t close the underlying shortfall. The public has noticed. In a June 2025 survey, just 36% of Americans told AARP they were confident in Social Security’s future, the lowest level since 2010. Much of the pressure is demographic. Social Security now serves roughly twice as many beneficiaries as it did in 1980, when about 35.5 million people collected. Lower birth rates mean fewer workers paying in, retirees are collecting for longer, and declining immigration has shrunk the pool of workers paying payroll taxes. Inequality plays a role, too. Payroll taxes apply only to earnings up to a cap, $184,500 this year, and high earners’ pay has grown faster than everyone else’s. The share of total wages subject to the tax fell from almost 87% in 1984 to roughly 83% today, according to Roosevelt Institute research reported by CBS News. “The Social Security trust fund is under strain because Congress has failed to update the program for the economy we actually have,” said Elizabeth Wilkins, CEO of the Roosevelt Institute, a progressive think tank. “Too much income now flows to the top, where it escapes Social Security taxation.” Congress fixed a similar crisis in 1983 The last time Social Security came this close, Congress acted. The 1983 amendments gradually raised the full retirement age from 65 to 67 and, for the first time, subjected some benefits to federal income tax. “We’ve had two instances in our history where it was suggested Social Security was going to go insolvent,” says Ernie Wingard, an advisor at Capital Choice Financial Group, “and in both of those instances, at the last minute, Congress was able to come to an agreement that saved it.” That 1983 fix was designed to keep the program solvent for 75 years. If the retirement fund runs dry in 2032 as projected, it will have lasted about 50. The fixes on the table, and their trade-offs Lawmakers have plenty of levers. Options modeled in the American Academy of Actuaries’ Social Security Challenge tool and in Social Security Administration analyses include: Raising the full retirement age from 67 to 69. Raising the payroll tax rate from 6.2% to 7.2% each for workers and employers. Lifting the cap on taxable earnings, set at $192,300 for 2027, to a higher level such as $250,000 or $400,000. Using a different inflation measure to calculate the annual cost-of-living adjustment (COLA), which would slow benefit growth. “Any fix has to close that gap through some mix of more revenue, such as a higher payroll tax rate or a higher cap on taxable earnings, and slower benefit growth, such as a later full retirement age or changes to the benefit formula,” Mulyadi says. “Each option has trade-offs, and the longer Congress waits, the larger each adjustment has to be.” The fight is over the mix. In a debate covered by Fortune, two economists who disagreed on whether to phase out Social Security still agreed that wealthy Americans would have to pay more. Treasury Secretary Scott Bessent, meanwhile, argued in June that economic growth can shore up the program without benefit cuts. “This is absolutely something that can be fixed,” says Nancy LeaMond, AARP’s executive vice president and chief advocacy and engagement officer. “Congress has hundreds of tools in its toolbox to strengthen Social Security and fill that gap of 20 percent or so without cutting the payments that Americans have earned for a lifetime of hard work.” “This should be a wake-up call: Congress needs to act,” AARP CEO Myechia Minter-Jordan said in a June statement. “Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire.” Whatever lawmakers choose, they have about six years to choose it. How to plan for a possible 22% cut For households, Mulyadi recommends planning with a range rather than a single number. “Log in to your my Social Security account at ssa.gov, look at your projected benefit, and test your retirement budget at about 75 to 80% of it,” he says. “If the plan still works, a cut is an inconvenience,” he says. “If it doesn’t, you still have time to save more, work a little longer, or rethink when to claim.”