Social Security trust fund to run out by 2032, new report warns

The clock is ticking faster for American workers and seniors.

The Social Security Administration’s newly released 2026 Trustees Report confirms that the federal retirement safety net is less than seven years away from fiscal depletion, as the Old-Age and Survivors Insurance (OASI) trust fund will completely exhaust its accumulated reserves in the fourth quarter of 2032.

Once the reserve dries up, ongoing tax revenues will cover only 78% of scheduled retirement benefits, according to the report.

“One Big Beautiful Bill Act (OBBBA): Enacted on July 4, 2025, this law makes permanent the lower income tax rates and adjusted tax brackets originally enacted under the 2017 Tax Cuts and Jobs Act and both increases and makes permanent the larger standard deduction of the 2017 Act,” the report says.

A Social Security Administration trustees report, released Tuesday, confirmed that the trust fund behind schedule payments will become insolvent by late 2032. (Getty Images)

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“The OBBBA also adds a temporary additional standard deduction for taxpayers over age 65,” it says. “As a result, less income tax will be paid on Social Security benefits, and the OASI and DI Trust Funds will receive lower levels of revenue in the future from income taxation of Social Security benefits.”

The nonpartisan Congressional Budget Office (CBO) previously warned about the fund’s insolvency date, explaining that, “because the government would not have the legal authority to make payments in excess of receipts, it would no longer be able to pay the full amounts scheduled or projected under current law.”

Social Security benefits are funded by payroll tax receipts along with the OASI trust fund, and once the trust fund is tapped out, the federal government would only be able to pay benefits equal to incoming payroll tax revenue under current law — meaning benefits would face cuts without action by Congress.

In an interview on the “Moon Griffon Show” Monday, House Speaker Mike Johnson, R-La., said: “The reason we’re in trouble is because over 74% of federal spending is on autopilot — mandatory spending, that is your entitlement programs like Medicare, Medicaid and things like Social Security — they have to be adjusted and fixed.”

“We have a plan to do that next year, and it’s critical, because we’re at $40 trillion-plus in debt. At some point you get into a hole so deep you can’t climb out of it, so desperate times call for desperate measures,” Johnson said.

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The Social Security Administration’s latest trustees report suggests that, if Congress alters the law to allow fund sharing between the retirement and healthier disability insurance system, the total depletion window can be extended to the third quarter of 2034. Following a combined depletion in 2034, 83% of scheduled benefits will be funded by ongoing payroll collections.

“The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way to phase in necessary changes gradually and give workers and beneficiaries time to adjust,” says the report. “Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits.”

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FOX Business’ Eric Revell contributed to this report.