Alright, let’s talk about something that could seriously affect your future—or your parents’ future—if we’re not careful: Social Security. You know that the monthly cheque millions of Americans depend on to pay rent, buy groceries, and keep the lights on. Well… a new update says those cheques might shrink. If nothing changes, the reduction could be significant—by a staggering 24%.
So grab your coffee, because I’m going to walk you through what’s happening, why it’s happening sooner than expected, and what that could mean for you.
The clock just got shorter
Social Security’s top actuary (think: the program’s head number-cruncher), Karen Glenn, recently sent a letter to Senator Ron Wyden. Her message? Thanks to a new law—the One Big Beautiful Bill Act (OBBBA)—the date when Social Security’s trust funds run dry just moved up.
Before the law, experts thought the funds would last until the third quarter of 2034. Now? We’re looking at the first quarter of 2034. That’s six months sooner, which in government time is basically “right around the corner.”
Meet the OBBBA: What this law does
The One Big Beautiful Bill Act is… well… big. It makes President Trump’s 2017 tax cuts permanent, bumps up spending on defence and immigration enforcement, temporarily cuts taxes on tips, and makes some tax changes for seniors.
It seems appealing at first glance. The problem is, those permanent lower income tax rates mean less money coming into the system. And since Social Security depends heavily on payroll taxes, smaller tax inflows mean less cash to pay out benefits.
Karen Glenn says OBBBA will cost Social Security’s trust funds about $168.6 billion over the next decade. That’s a lot of zeros.
How Social Security really works (and why it’s in trouble)
Quick refresher: Social Security has two main trust funds—OASI (Old-Age and Survivors Insurance) and DI (Disability Insurance). Together, they’re called OASDI.
Money comes in mainly from payroll taxes you and your employer pay. That money goes into the trust funds, and from there, benefits get paid out to retirees, people with disabilities, and survivors of deceased workers.
Here’s the catch—under federal law, Social Security can only pay out what it collects in payroll taxes plus what’s in the trust funds. Once the trust funds are empty, benefits automatically get cut so the program can only spend what it brings in.
What a 24% cut looks like in real life
According to the Committee for a Responsible Federal Budget (CRFB), if Congress does nothing, benefits will face a 24% cut in late 2032—two years before insolvency officially hits.
Let’s put that into dollars:
- Medium-income dual-income couple: About $18,100 less per year (that’s roughly $1,509 less per month).
- Medium-income single-income couple: Around $13,600 less a year.
- Low-income couple: About $11,000 less a year.
- Low-income single-income couple: Around $8,200 less annually.
- High-income dual-income couple: Could lose $24,000 a year.
- High-income single-income couple: About $18,000 less each year.
That amount is significant—it could impact our ability to manage the mortgage.
Read more social security news today:
Big change coming to social security: payments will never be the same
Stupid mistakes nobody should be making when thinking about social security for retiremen
Why this could get even worse
The scary part? These cuts aren’t a one-time thing. Over time, they’d likely get bigger. CRFB projects that by 2099, benefit cuts could climb to over 30% if nothing changes.
And here’s the kicker—more retirees + fewer workers paying in = even less money for the system. The baby boomer generation is retiring in huge numbers, which means more people taking money out while fewer are putting money in.
Why politicians keep dodging the issue
If you’ve noticed, many politicians like to say, “We’re not touching Social Security!” It sounds reassuring—until you realise that doing nothing is actually the same as saying, “Yep, we’re fine with 24% benefit cuts in less than a decade.”
CRFB says it bluntly: “Policymakers pledging not to touch Social Security are implicitly endorsing these deep benefit cuts for 62 million retirees in 2032 and beyond.” Translation? If they fail to take action, it will be at your cost.
What could be done (If they actually did something)
Lawmakers have options—though none are easy:
- Raise payroll taxes so more money comes in.
- Consider increasing the retirement age to ensure benefits are distributed over a shorter period.
- Adjust benefits—which could mean reducing payments for higher earners.
- Use general tax revenue to shore up Social Security (basically, transfer money from other government programs).
The longer they wait, the harder and more painful the fix will be.
What this means for you
If you’re close to retirement age, this could affect your budget sooner than you think. If you’re younger, you’ve got more time to prepare—but also more years to worry about whether the system will still be there for you.
This isn’t a “maybe” problem. This is a “happening unless someone steps in” problem.
Bottom line
We’re looking at Social Security’s trust funds running out about six months earlier than we thought, thanks to recent tax cuts and spending changes. If nothing changes, benefits could drop by almost a quarter in less than a decade.
So when you hear politicians promise they “won’t touch” Social Security, remember—that can be just another way of saying they’ll let it take a massive hit.
The reality is that the system will not repair itself. Those who rely on those cheques will be affected the most. They’re the ones who’ll feel it first.
