Two-income retired couple may lose $18,100 annually in Social Security in 2033

USA Today

4 days ago

A dual-earning couple retiring at the start of 2033 can expect an average $18,100 lower annual Social Security benefit than if they retired now, according to a new analysis from the Committee for a Responsible Federal Budget.
The 24% drop is expected to come just after Social Security's Old-Age and Survivors Insurance (OASI) Trust Fund is depleted. OASI holds money collected from payroll taxes to help fund Social Security. That fund is expected to be depleted by late 2032 as the number of retired people outpaces the number of workers.
Once OASI's depleted, Social Security benefits will no longer be paid at the full rate. Instead, benefits will be cut, only payable by the amount of money coming in.
Even worse, "the cuts would grow over time as scheduled benefits continue to outpace dedicated revenues," the nonprofit CRFB said in its analysis. By 2099, the size of the required benefit cut would grow to well over 30%, it said.
Here's how cuts could affect Americans
The $18,100 annual cut is an average for a two-income couple. Depending on a couple's age, marital status, and work history, the actual size of the benefit cut would vary.
Here are some examples of how Americans could be affected, in nominal or non-inflation adjusted terms, CRFB said:
How many Americans could be affected?
In June, nearly 67 million Americans received Social Security, according to the Social Security Administration.
Social Security is deemed important by 96% of Americans in 2025, with little difference among age groups and political party affiliation, an AARP survey of 3,599 adults ages 18 and older taken last month showed. AARP is a nonprofit advocating for older Americans.
Nearly two in three retired Americans say they rely substantially on Social Security, while another 21% say they rely on it somewhat, AARP said.
CRFB vs Social Security and Medicare Trustees
The CRFB's estimates of a 24% cut in seven years is more dire than the 23% drop in eight years provided by the Social Security and Medicare Trustees report in June. That's because CRFB accounts for the impact from the One Big Beautiful Bill Act (OBBA) signed into law over the Fourth of July, the think tank said.
"The tax rate cuts and increase in the senior standard deduction from the recently enacted OBBBA would reduce Social Security's revenue from the income taxation of benefits, increasing the required cut by about a percentage point upon insolvency," CRFB said. "If the expanded senior standard deduction and other temporary measures of OBBBA are made permanent, the benefit cut would grow larger."
The OBBBA's $6,000 extra senior deduction is slated for 2025 through 2028.
What can government do to keep 100% benefits flowing?
Congress will have to increase revenue coming into the program by possibly raising payroll taxes, reducing overall spending on benefits maybe by raising the full retirement age, or some combination of the two, AARP suggested.
Also, eliminating the maximum income that's taxable for payroll tax and reducing the benefits paid on higher earnings are also among steps Congress could take to save money, the CRFB said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [e-mail] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.