The Congressional Budget Office projects that Social Security’s Old-Age and Survivors Insurance Trust Fund, which pays retirement and survivor benefits, will be exhausted in fiscal year 2032. The estimate comes from CBO’s 2026 Long-Term Projections for Social Security, released September 17, 2026, which also finds that the gap between the program’s outlays and revenues generally widens over the next 75 years.
The new projection lines up with the date the Social Security Trustees reported in June, and it adds an independent estimate of how large the shortfall would be for retirees if Congress does not act. Monthly checks would not stop at exhaustion, but under current law they could only be paid from incoming revenue.
What CBO’s September projections show
CBO, the nonpartisan agency that provides budget analysis to Congress, updates its 75-year Social Security outlook each year. In the 2026 edition, the OASI balance runs out in fiscal 2032. According to an analysis of the CBO figures by the Committee for a Responsible Federal Budget, published September 21, CBO places that exhaustion around mid-2032 and projects that payable retirement benefits would then fall about 26 percent below scheduled amounts, with the gap widening to about 40 percent by the end of the century.
CBO also looks at a hypothetical in which the retirement fund and the Disability Insurance Trust Fund are treated as one pool, which would require a change in law. In that case, the combined reserves would last until 2033, and beneficiaries would face a reduction of about 23 percent, growing to 37 percent by 2100, according to the CRFB summary.
Over the full 75-year window, CBO puts the program’s shortfall at 4.57 percent of taxable payroll, or about 1.56 percent of gross domestic product. Put another way, CRFB calculates that the solvency gap equals about one-quarter of projected benefits or one-third of projected revenue, so closing it would take a benefit reduction or revenue increase on that scale, or some combination of the two.
Inside the planner. A projected gap in Social Security puts more weight on how savings are drawn down and taxed around the monthly benefit. The planner covers four calculators for provisional income, IRMAA tier, the RMD schedule and Roth bracket fill, along with the account withdrawal order, in The Retirement Tax & Withdrawal Planner.
How CBO’s numbers compare with the Trustees
The Social Security Trustees released their own annual assessment on June 9. The 2026 Trustees Report projected that OASI reserves would be depleted in the fourth quarter of 2032, after which continuing income would cover about 78 percent of scheduled retirement and survivor benefits, a cut of roughly 22 percent. The Trustees projected that combined OASI and Disability Insurance reserves would last until 2034, with 83 percent of benefits payable at that point.
CBO’s outlook is somewhat more pessimistic. Its initial benefit cut of about 26 percent is larger than the Trustees’ 22 percent, and its combined-fund date of 2033 comes a year earlier than the Trustees’ 2034. CBO’s 75-year shortfall of 4.57 percent of taxable payroll is also slightly wider than the Trustees’ estimate of 4.42 percent. The two agencies use different models and assumptions about fertility, immigration, wage growth, inflation, and interest rates, so their figures are not expected to match. What stands out is that two separately prepared projections now point to the same year for the retirement fund.
The September report also follows CBO’s February budget baseline, which had already moved the projected OASI exhaustion date to 2032 from the 2033 date in its earlier projections.
Why costs are outrunning revenue
The underlying problem is a widening gap between what Social Security pays and what it collects. The CRFB analysis of CBO’s data shows program costs rising from 10.7 percent of taxable payroll in 1990 to 15.0 percent today, and to a projected 16.5 percent by 2032 and 21.0 percent by the end of the century. Revenues, by contrast, have barely moved, from 12.7 percent of payroll in 1990 to 12.9 percent today.
Demographics account for much of that divergence. As baby boomers retire and birth rates stay low, fewer workers are paying payroll taxes for each beneficiary. The Trustees reported in June that total program cost is expected to exceed total income, including interest, starting in 2026, which means the trust fund reserves are being drawn down to cover the difference. Once those reserves are gone, only current payroll-tax and benefit-tax revenue would be available to pay benefits.
What exhaustion would and would not mean
Trust fund exhaustion is not the same as Social Security going away. Payroll taxes would continue to flow in, and benefits would continue to be paid. The issue is that, under current law, the Social Security Administration has no authority to pay more than the program takes in once reserves are depleted, so benefits would be reduced across the board to match incoming revenue.
For a retiree, a 22 to 26 percent reduction would be substantial. A monthly benefit of 2,000 dollars, for example, would drop to somewhere between about 1,480 and 1,560 dollars under those estimates. The cut would apply to current retirees as well as new claimants, not only to younger workers, unless lawmakers write different rules.
Nothing in CBO’s projections changes benefits today. Eligibility rules, full retirement age, the benefit formula, and annual cost-of-living adjustments continue under existing law. Congress has changed Social Security’s financing several times before, most notably in 1983, and lawmakers could raise revenue, adjust benefits, or both before 2032.
Where policy debate stands
Responsibility for a fix rests with Congress, which sets Social Security’s taxes and benefit rules. Social Security Commissioner Frank Bisignano said when the Trustees Report was released that lawmakers and the agency need to work together to protect the program. CRFB called the CBO release a timely reminder of the risk facing retirees and argued that the longer lawmakers wait, the more expensive a fix becomes, while timely action would limit the size of needed adjustments and allow more time to phase them in.
For households within a decade of retirement, the practical takeaway is that Social Security is likely to remain the foundation of retirement income, but its long-term level carries more uncertainty than a benefit statement alone suggests. Planning that treats savings withdrawals, taxes, and claiming age together leaves more room to adjust if Congress changes the rules.
Planning income around an uncertain benefit
A projected reduction in Social Security raises the stakes for the rest of a retirement income plan, especially the order in which savings are tapped and how much of the benefit ends up taxed.
The Retirement Tax & Withdrawal Planner includes a provisional-income calculator for estimating how much of a Social Security benefit is taxable, the account withdrawal order, the senior deduction, and the IRMAA appeal route (SSA-44).
Map out a withdrawal plan with The Retirement Tax & Withdrawal Planner.
This article was prepared with AI assistance and reviewed against the linked official sources.
