Key takeaways

• Trust fund depletion is projected for 2032.
• Even then, program revenues are expected to cover roughly 78% of benefits.
• We believe policymakers are likely to act to preserve benefits, but timing remains uncertain.
• Retirement savings are critical as Social Security only provides a portion of retirement income.
• Claiming decisions should be based on your situation, not concerns about the program's long-term outlook.

On June 9, 2026, the Social Security Administration (SSA) released its annual Trustees Report. The report projects that, if no changes are made to the program, the trust funds will be depleted in 2032, one year earlier than last year's estimate. After that point, ongoing program revenues would be enough to pay roughly 78% of scheduled benefits.

Importantly, “depletion” doesn't mean benefits would stop entirely. In the unlikely event that reserves are exhausted, payroll tax revenue would continue to fund a substantial portion of benefits. While the projected shortfall presents a challenge, there is strong historical precedent for reform.

Social Security can be fixed

Social Security is a popular program that provides an essential income stream to over 56 million retirees. As such, we believe action will be taken in the future to preserve benefits. It's also important to remember that we've been here before. In the early 1980s, the Social Security program was months away from missing payments, but it was put on firmer footing through multiple changes that preserved benefits and made the program more sustainable for future generations.

The good news is Congress is paying attention and politicians from both parties have recently explored means to shore up the program. They've asked the SSA to analyze the effects of removing the earnings ceiling for Social Security taxes, increasing the payroll tax rate, raising the age for eligibility or the full retirement age, among many others. For example, according to SSA Board of Trustees estimates, raising the combined payroll tax from 12.4% to 16.65% would fully fund the program through at least 2100. That said, these aren't easy decisions to make, so while we believe action will be taken, it's unlikely to happen until 2032 is more imminent. 

Focus on what you can control

Until we have greater clarity, we encourage you to focus on the things you can control, like how much you save for retirement and when you claim your Social Security benefit. 

Social Security was never intended to be the sole source of income in retirement. According to the SSA, benefits replace about 40% of pre-retirement income for a median earner who claims at full retirement age. This means you'll likely be responsible for most of your retirement income. So, one way to feel more secure in your retirement income strategy is to save more for your own retirement.

While some individuals may consider claiming benefits earlier due to concerns about the program’s long-term outlook, we generally recommend against doing so. Claiming before full retirement age can permanently reduce your benefit by up to 30%. Because future cost-of-living adjustments are applied to this lower base and retirement can last 25 years or more, this reduction can significantly impact your lifetime income. Additionally, claiming early can permanently reduce the amount a surviving spouse receives. 

It's also important to understand that a benefits cut would apply to all recipients of Social Security retirement benefits – that means if you claim early, you'll get a benefits cut on an already reduced benefit amount. As a result, taking benefits early due to concerns over future cuts generally doesn't improve the overall outcome in a meaningful way. In most cases, if your plan called for delaying benefits, that strategy is likely to still hold.

Run your numbers

While we believe Social Security will remain an important part of Americans’ retirement income, it’s a good idea to work with your financial advisor to understand the long-term effects of your claiming decision before you begin taking benefits. Your advisor can run projections assuming both full benefits and a potential reduction, which can help you understand the impact of different scenarios, identify ways to mitigate risk and feel more confident in your retirement strategy.