Social Security, which pays out more than a trillion in benefits to millions of Americans, is set to deplete its trust fund by 2034.
Although retirees will still get benefits, the payouts will be significantly lower and are expected to be cut by 23%.
The system is currently paying out more in benefits than the amount of payroll taxes it brings in due to lower birth rates, an aging population, and a cap on the amount that people are taxed regardless of how rich they are.
Another obstacle: President Donald Trump’s deportation policies, which could accelerate the program’s insolvency date and have a chilling effect on immigration. His administration reportedly wants to deport 1 million undocumented immigrants a year. About 11 million undocumented immigrants live in the U.S., according to a Pew Research Center estimate.
Undocumented immigrants paid $24 billion in Social Security taxes in 2024 without receiving any benefits themselves. These workers often use a fake Social Security number or someone else’s when applying for a job, but those benefits end up with the owner of that number.
Deporting undocumented immigrants over the next decade will reduce Social Security revenue and deplete the Social Security trust fund earlier than expected, according to the Penn Wharton Budget Model.
Social Security benefits are primarily funded by payroll taxes split between the employer and employee. Younger, working-age people have to support more retirees than they did in the past because of demographic shifts, said Tara Watson, director of the Center for Economic Security and Opportunity at the Brookings Institution.
“Immigration is really driving almost all of our population growth and almost all of our labor force growth as well. So as we cut off that spigot, we’re going to find that we have more old people per working-age person,” Watson said.
The PWBM looked at how Trump’s deportation policies will affect Social Security funding by mapping out various scenarios. Under all scenarios, funding would be depleted six months earlier than expected.
In its first projection, PWBM analyzed what would happen if the government deported 10% of undocumented immigrants each year during Trump’s second term, but immigration and deportation rates revert to baseline projections after his term is over. In this scenario, Social Security will lose $73 billion in funds over the next decade and $218 billion over the next 30 years.
The PWBM also modeled what would happen if the government deports 10% of undocumented immigrants annually over the next 10 years.
In this scenario, Social Security will lose $133 billion in funds over the next decade. If immigration rates return to baseline levels after 10 years, Social Security funds will end up declining by $656 billion over the next 30 years. But if any future unauthorized immigration stops after 10 years, funding will plummet by $884 billion over the next 30 years.
“Overall, all deportation scenarios result in lower program income, worsened long-term balances, and a faster depletion of the Trust Fund relative to the baseline,” according to the PWBM.
The PWBM says one way the government could compensate for that lost revenue is by raising payroll taxes.
Watson said if Trump is able to succeed with his immigration deportation goals, that will “definitely hurt” Social Security. But she said what will be more impactful is if fewer immigrants end up coming to the U.S. because of Trump’s policies.
These deportation policies will have the indirect effect of making America a less desirable destination, Watson said.
About 2.5 million to 2.8 million fewer people are expected to come to the U.S. in 2025 compared to 2024, according to a recent report co-authored by Watson.
“What really matters is the long-run, healthy immigrant flow that we have in this country and have had for a long time,” Watson said.
The Trump administration is averaging 14,700 deportations a month, which is far lower than the monthly average of 36,000 in 2013 under the Obama administration, NBC News reported. But the U.S. Immigration and Customs Enforcement arrested 30,000 immigrants in June, the highest on record since data became publicly available in 2020, NBC News said.
ICE is also arresting people indiscriminately, Watson noted.
“The current administration is casting a very wide net in terms of who they are arresting. They’re not spending too much time trying to figure out who the right targets are,” Watson said. “Now, the sense is anyone could be picked up at any time, regardless of their criminal history.”
Trump’s new tax bill also includes $170 billion for immigration enforcement and deportations. Watson said she expects the administration to have greater success in deporting people as a result.
While undocumented immigrants greatly contribute to the Social Security system, it isn’t an uplifting talking point for immigrant advocates since these workers don’t get any benefits themselves, said Daniel Costa, director of Immigration Law and Policy Research at the Economic Policy Institute, in a 2019 Marketplace interview.
If they could work here legally, economists like Ray Perryman say they would still benefit the Social Security system.
“Social Security was originally established as part of the New Deal at a time when there were almost 40 workers for every retiree, life expectancies were much shorter, and self-employed farmers and women who did not work outside the home were a substantial part of the population and not eligible for benefits,” said Perryman, the president and CEO of The Perryman Group, an economic research firm.
Immigrants allowed to work in the U.S. legally would have labor rights and bargaining power, which means they would probably have higher taxed wages. That would result in greater contributions to the Social Security system, wrote Nina Roberts for Marketplace.
We do have initiatives that grant permanent residency to immigrants, like the Diversity Visa Program, but there are limits on the number of people who are allowed into the country, Watson said.
That program grants about 50,000 visas a year, a figure that was set in the 1990s. “Our economy has roughly doubled since then, and we are still working with these really outdated numbers,” Watson said.
Watson said she thinks the U.S. needs to expand the number of legal pathways available to immigrants.
“It’s beneficial to our economy to have them come,” Watson said.