Social Security will be unable to pay full retirement benefits by 2034, one year earlier than previously projected, according to a new report released Wednesday by the Social Security Board of Trustees.
The updated annual forecast cites multiple factors for the worsening outlook, including population trends and a recent expansion of benefits for certain public-sector retirees. Without reform, beneficiaries could see a 19% cut in their payments within the next decade, the report found.
“Congress can’t keep dodging entitlement reform. Social Security’s $28 trillion in unfunded liabilities is about the same size as America’s entire GDP,” Ryan Young, senior economist at the Competitive Enterprise Institute, told the Daily Caller News Foundation. “The problem is structural, and will not improve on its own.”
Social Security spending is projected to reach 6% of the GDP by 2035, but the Trump administration and congressional GOP leadership have pledged not to touch benefits. Even broaching this topic may prove politically perilous as the 2026 midterm elections approach.
However, maintaining the long-term viability of the safety-net program will require substantial reform.
“Social Security’s current pay-as-you-go financing has built-in demographic problems that no amount of creative accounting can solve,” said Young. “Transitioning to a personal account system, such as about 30 countries around the world use, is not optional. It would also give retirees better returns while reducing current workers’ tax burdens, while giving people ownership over their retirement savings.”
Declining population trends spell more trouble for the future of Social Security, as the program depends on the working population to fund payouts for retirees through taxes. Only 66% of women ages 20 to 24 plan to have at least one child, compared to 93% in 2012 and 94% in 2022, a recent Pew Research Center poll found.
While the administration has ruled out cuts to the program, it has worked to identify and eliminate fraud in the system in collaboration with the Department of Government Efficiency (DOGE).
“The job is about building the largest level of integrity, the highest accuracy rate,” Social Security Administration Commissioner Frank Bisignano recently told the DCNF, emphasizing the need to “lockdown” Social Security numbers, which are vulnerable to exploitation.
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