Social Security, Medicare Funds May Dwindle In Less Than A Decade, Report Finds

WASHINGTON, D.C. — The social safety net programs that support millions of seniors and retirees across the country may run out of money faster than previously projected, a new government report warns.

According to the Social Security Board of Trustees' annual report released Wednesday, June 18, the combined reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) trust funds are now expected to run dry in 2034 — one year earlier than last year’s projection. At that point, the system would only be able to pay 81 percent of scheduled benefits, unless Congress acts.

The Old-Age and Survivors Insurance trust fund on its own is still expected to be depleted in 2033, the same as last year, with 77 percent of benefits payable at that time.

“The reserves of the combined trust funds declined by $67 billion in 2024, bringing the total to $2.72 trillion,” the report states. “Total annual costs are expected to exceed income in 2025 and remain higher for the rest of the 75-year projection period.”

This ongoing imbalance raises significant concerns for the roughly 70 million Americans expected to receive Social Security benefits next year and the 185 million workers currently paying into the system.

"Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives," said Mycelia Minter-Jordan, CEO of AARP, in a statement Wednesday. "More than 69 million Americans rely on Social Security today and as America's population ages, the stability of this vital program only becomes more important."

Social Security’s long-term financial outlook is also worsening. The actuarial deficit over the next 75 years has grown to 3.82 percent of taxable payroll, up from 3.50 percent in last year’s estimate, according to the report.

"To ensure we serve the public and deliver high-quality service to the 185 million people who work and pay payroll taxes for Social Security and the 70 million beneficiaries who will receive benefits during 2025, the financial status of the trust funds remains a top priority for the Trump Administration,” said Frank Bisignano, Commissioner of Social Security. “Congress, along with the Social Security Administration and others committed to eliminating waste, fraud, and abuse, must work together to protect and strengthen the trust funds for the millions of Americans who rely on it – now and in the future – for a secure retirement or in the event of a disability."

Meanwhile, Medicare’s Hospital Insurance (HI) trust fund, which helps cover inpatient hospital services for seniors, is now projected to be depleted by 2033—three years sooner than previously forecast. At that time, it would be able to pay only 89 percent of scheduled benefits.

"Medicare is the primary source of health care for Americans age 65 and older and plays an essential role in negotiating lower prescription drug costs," Minter-Jordan said. "It’s paramount that the program remains financially strong for current and future generations."

While the Disability Insurance (DI) fund is now projected to remain solvent through 2099, the report notes that current law prohibits combining the OASI and DI trust funds to extend solvency — though exceptions have been made during past crises.

Some experts warn that current political proposals could further destabilize the system.

Though not factored into the report, new tax proposals, tariffs, and large-scale deportation efforts could reduce payroll tax revenue.

Those changes “pose serious threats to Social Security’s financing,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, according to CNBC.