Projected Cost of Social Security Deficit by 2033 for Individuals
The Social Security system, a vital safety net for millions of Americans, is facing a potential crisis. If no action is taken, the program could pay about 77% of scheduled benefits, mostly from ongoing worker contributions, according to recent reports. This is a concern for Americans approaching and in retirement, as well as for those yet to retire.
The Social Security Trust Fund is expected to be insolvent in 2033, three calendar quarters earlier than the previous estimate. To cover the possible reduction in benefits, workers might need to save an additional $138,000, depending on their age. For instance, Americans aged 25 have a 42-year window to save this amount, requiring a monthly savings target of $81 and an annual savings target of $967. For those aged 35, the window is 32 years, with a monthly savings target of $146 and an annual savings target of $1,753. As the age increases, so does the savings target. Americans aged 45 have a 22-year window, requiring a monthly savings target of $288 and an annual savings target of $3,455. For Americans aged 55, there is a 12-year window to save the additional $138,000, requiring a monthly savings target of $701 and an annual savings target of $8,416.
The average retiree received $2006.69 in July. A 23% cut would translate into losing almost $461.54 per month, or $5,538.46 per year. This is a significant amount that many retirees may find challenging to make up.
The median retirement savings for all families is $87,000, according to the Federal Reserve's Survey of Consumer Finances. More than half of Americans not yet retired lack confidence in having the same Social Security benefits as current retirees, according to a study from the National Institute for Retirement Security (NIRS). This lack of confidence is understandable given the potential cuts.
The potential solutions and congressional actions proposed to address the projected Social Security trust fund insolvency by 2033 focus chiefly on reform measures to extend the program's solvency and avoid anticipated benefit cuts of about 23%. Key proposals under discussion include raising the payroll tax rate, increasing the taxable maximum income cap, adjusting benefit formulas, raising the full retirement age, and modifying tax policies that affect trust fund revenues.
Congressional leaders have been urged to consider such reforms to prevent the depletion of the Old-Age and Survivors Insurance (OASI) trust fund projected for 2033. While no single consensus reform package has been enacted as of mid-2025, bipartisan calls for a combination of revenue increases and benefit adjustments are common in policy discussions to restore long-term financial stability for Social Security.
Further Congressional actions may also include establishing commission studies or bipartisan task forces to devise comprehensive reform plans and exploring options to temporarily draw from other trust funds, though this is a short-term fix and not sustainable long term.
These proposals are aimed at preserving Social Security's role as a safety net for retirees while adapting to demographic shifts such as the rising retiree-to-worker ratio that is straining the program's finances. The overall unity in wanting to see action may finally spur some action from Congress. A majority of Americans, across all demographic groups, want Congress to take action to address the looming trust fund insolvency.
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