The Social Security trust fund depletion projected for 2032 will trigger automatic cuts to retirement payments just as the national debt has passed $40 trillion, with younger workers bearing the cost of a system they largely do not expect to collect from.
The 2026 Social Security trustees report projects the Old-Age and Survivors Insurance (OASI) trust fund will be exhausted in the fourth quarter of 2032. At that point, continuing programme income would cover only 78% of scheduled retirement benefits, according to the trustees report.
EPIC for America, citing the Congressional Budget Office baseline, puts the resulting cut at 28%, a figure sharper than the approximately 22% across-the-board reduction estimated by the Committee for a Responsible Federal Budget (CRFB). The combined Social Security trust funds are separately projected to be depleted in 2034, when incoming revenue would cover 83% of scheduled benefits.
Debt costs piling up as Social Security trust fund depletion looms
The Congressional Budget Office projected in 2023 that federal spending on Social Security and Medicare will account for 81% of the increase in mandatory spending between 2023 and 2033. In 2026 alone, increases in the two programmes account for nearly half the projected $362 billion rise in mandatory outlays.
Net federal interest costs are projected to exceed $1 trillion in 2026 and rise to $2.1 trillion by 2036, meaning the government is spending heavily to service debt accumulated from previous deficits even as entitlement programmes continue growing.
Some of the oldest Americans are eligible for more than $100,000 a year in combined Social Security benefits. CBS News reported that roughly one million individual Social Security beneficiaries receive at least $50,000 a year, meaning a married couple with two such beneficiaries could together receive a six-figure sum.
Young Americans sceptical they will see any benefit
A December 2025 survey by the Cato Institute found that only 34% of Gen Z respondents expected Social Security to exist when they reached retirement. A June 2026 Cato analysis found that 79% of younger respondents expected some type of cut to their own future benefits.
“The survey revealed that young Americans are the least likely to expect Social Security will exist for them,” the Cato study noted, “the most open to reforms, and the least likely to understand how the program works.”
Cato’s polling found only 45% of Americans correctly understand that Social Security is a pay-as-you-go programme, in which payroll taxes from today’s workers fund benefits for today’s retirees. Employees and employers each pay 6.2% of wages into Social Security up to an annual taxable maximum of $184,500 in 2026. Self-employed workers pay the combined 12.4% rate.
A median-wage worker retiring in 2027 is expected to receive roughly $730,000 in lifetime Social Security benefits compared with less than $200,000 in combined contributions from the worker and employer. When the employer contribution is excluded, lifetime benefits amount to roughly 265% of what the worker personally paid in.
Baby boomers collectively hold roughly $93 trillion in wealth, according to Visa Business and Economic Insights, but only about $36 trillion is expected to pass to millennials and Gen X over the next two decades. Boomers are expected to spend approximately $16 trillion during retirement on housing, food, healthcare, prescriptions and other expenses.
CRFB has proposed capping Social Security benefits at $100,000 annually for a married couple retiring at normal retirement age, with a comparable $50,000 limit for single retirees. The organisation estimates the cap would affect the top 0.05% of couples in its early years, households with average annual retirement income above $2.5 million and average net worth above $65 million.
A maximum-earning worker claiming Social Security at age 70 can receive more than $61,000 a year, Cato notes, and the institute has called on policymakers to “fundamentally rethink the program’s structure and transform it into a system that ensures seniors are protected from poverty when they can no longer work, while also freeing up resources for younger workers to save more on their own.”
Without congressional action before 2032, the Social Security trust fund depletion will bring those cuts into force automatically.
