Americans have been concerned for years that Social Security would run out before they ever got the chance to cash in. Now (as if the economic landscape isn’t volatile enough), a new projection by the Congressional Budget Office (CBO) shows that the main trust fund is on track to run out a year earlier than originally projected.
When Will Social Security Run Out?
According to the CBO’s latest outlook, the Old-Age and Survivors Insurance Trust Fund — the pot that pays retirement and survivor benefits — is now projected to be depleted in 2032, not 2033. That doesn’t mean checks suddenly stop. The Social Security Administration would still collect payroll taxes and continue sending benefits. But without the trust fund cushion, it likely couldn’t pay the full promised amount.
Policy experts estimate that once the reserves are gone, incoming payroll taxes would cover about 81% of scheduled benefits. In other words, unless Congress steps in, automatic cuts become the math. The reason for the revised timeline comes down to updated economic assumptions. The CBO now expects somewhat higher inflation in the coming years. Because Social Security benefits rise with the annual cost-of-living adjustment (COLA), a bigger COLA means larger checks — which also means the trust fund drains faster.
The agency is projecting a 3.1% COLA for 2027, following a 2.8% adjustment for 2026. At the same time, the CBO expects somewhat lower trust fund income due to reduced payroll and individual income tax collections. This squeeze isn’t new. The program has been dipping into its reserves since 2021, when benefit payouts began exceeding incoming revenue. An aging population and a growing number of retirees continue to put pressure on the system.
What Are People Saying?
Par for the course, Redditors are fired up, with one user commenting, “Ah yes the ‘entitlement’ I’ve paid into for 30 years won’t be there when I am ready to collect. Anytime someone calls it an entitlement GTFO.”
Another called out how this isn’t a new issue, commenting, “I do not understand how something can be called unexpected when you see a story about it every three months for decades. A bigger story would be the people who thought SS was doing fine.”
Arguments about entitlement and politics were prevalent, but many users were quick to point out that while Social Security might get reduced, there will still be benefits to collect as long as workers have to keep paying into it.
So, How Should We Plan Ahead?
First, don’t assume Social Security will disappear. The reality is that it remains one of the most widely relied-upon federal programs. Lawmakers have options — from adjusting payroll taxes to modifying benefits formulas — but they’ll have to act.
Second, treat Social Security as one piece of your retirement plan, not the whole thing. If you’re still working, that means prioritizing contributions to employer-sponsored plans like a 401(k), opening or funding an IRA, and building assets outside of government benefits.
It also means running conservative projections. Financial planners often model scenarios where retirees receive less than 100% of promised benefits. Planning for that possibility now can prevent a scramble later. The headline may sound dramatic. The underlying issue isn’t new. The clock, however, is ticking — and 2032 is closer than it looks.
Are you concerned about Social Security running out? Share your thoughts in the comments.