Social Security Could See Ample Cuts by 2032

Dual-income couples could see their annual Social Security benefits slashed by $18,000 just seven years from now, according to a new analysis from the nonpartisan Committee for a Responsible Federal Budget. The findings released Thursday warn that by late 2032, benefits will drop 24% for retirees if Congress fails to shore up the program's finances, reports Axios. That translates to a significant hit for a dual-earner couple retiring in 2033, with ripple effects that could double the poverty rate among seniors, analysts say.

• USA Today breaks it down further, noting that an average single-earner couple could be faced with a $13,600 reduction, while a dual-earning low-income couple may see a $11,000 annual cut. High-income couples, meanwhile, could be hit with a decrease of closer to $24,000.

• Per the AARP, nearly two-thirds of Americans who've put away their work briefcase for good say they rely substantially on Social Security, with another 21% saying they rely on it somewhat.
• "Policymakers pledging not to touch Social Security are implicitly endorsing these deep benefit cuts for 62 million retirees in 2032 and beyond," the CRFB said, per Fox Business. "It is time for policymakers to tell the truth about the program's finances and to pursue trust fund solutions to head off insolvency and improve the program for current and future generations."
• The looming cuts stem from the depletion of the Social Security trust fund, which had already started tapping its reserves in 2021 to keep paying out benefits. For decades, the fund collected more in payroll taxes than it paid out, but that surplus is now eroding as the population ages and fewer younger Americans contribute. Once the reserves run dry, Social Security would shift to a pay-as-you-go model—benefits paid out strictly from incoming payroll taxes.
• Complicating matters, recent tax cuts and new deductions for seniors are projected to accelerate the trust fund's depletion by about a year, further straining the system, per the CRFB. The analysis also notes that Medicare hospital payments could face an 11% reduction, threatening health care access for retirees.
• Policy experts doubt Congress would passively allow such significant benefit cuts. The AARP notes that lawmakers may have to raise payroll taxes, cut the overall benefits outlay (perhaps by raising the retirement age), or a combination of the two, per USA Today?.