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Published: Aug 22, 2023 9 min read
Photo-illustration of layered blurred social security cards.
Money; Getty Images

A Social Security funding crisis could be on the horizon if policymakers fail to take action to protect the program in the next decade, threatening a 23% cut to all 70 million recipients' annual benefits, a new report claims.

The analysis by U.S. Budget Watch 2024, a project from the public policy organization Committee for a Responsible Federal Budget, predicts that if the primary trust fund used to bankroll Social Security runs out of reserves by 2033, the average newly retired dual-income couple would see an immediate reduction of $17,400. Single-income couples would lose $13,100.

The CRFB’s projections are based on an annual report released in March by the Social Security Board of Trustees, which predicted in January that the Old-Age and Survivors Insurance (OASI) Trust Fund will reach insolvency in the next 10 years without comprehensive revenue and benefits adjustments.

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By that time, today’s youngest retirees, who are 62 years old, will be 72, and today's 57-year-old workers will have reached the minimum retirement age.

Once the trust fund is depleted, by law, it can only spend as much as it receives in incoming revenue, resulting in cuts for all beneficiaries. The warning comes as candidates in the next presidential election face partisan pressure to promise not to touch Social Security, a move that the CRFB says would spell disaster.

“Any 2024 presidential candidate who pledges not to touch Social Security is implicitly endorsing a 23 percent across-the-board benefit cut for the 70 million retirees when the Social Security retirement trust fund reaches insolvency in just a decade,” the CRFB says in the report.

How is Social Security financed?