Social Security Trust Fund Solvency

The Social Security Old-Age and Survivors Insurance (OASI) Trust Fund is projected to deplete its reserves in 2032 or 2033 under current law — the 2025 SSA Trustees Report (intermediate assumptions) puts the date at 2033, while CBO long-term projections and the Trustees' high-cost scenario put it a year earlier in 2032. The combined OASI+DI funds — together known as OASDI — would deplete in 2033 or 2034 if treated as a single program (Trustees intermediate: 2034; downside scenarios: 2033). After depletion, incoming payroll taxes would cover only 77% of scheduled OASI benefits (or 81% of combined OASDI benefits). The 2025 Trustees Report (intermediate assumptions) puts the 75-year long-range actuarial deficit at 3.82% of taxable payroll, with the annual gap in the 75th year reaching 4.84% of payroll — the standard yardsticks Congress and the SSA Office of the Chief Actuary (OACT) use to score reform proposals. This page summarizes the current solvency math and the OACT's published catalog of policy provisions that would change the program — the menu nearly every Social Security bill draws from.

Current Law (2026)

Legal Authority

• 42 U.S.C. § 401 — Social Security Act § 201; OASI and DI Trust Funds (creation, administration, investment in special-issue Treasury obligations)
• 42 U.S.C. § 415 — Computation of primary insurance amount (PIA), bend points, and the annual cost-of-living adjustment (COLA)
• 42 U.S.C. § 416 — Definitions, including normal retirement age
• 42 U.S.C. § 430 — Adjustment of contribution and benefit base (annual taxable maximum indexed to the national Average Wage Index, or AWI)
• 42 U.S.C. § 1395i — Federal Hospital Insurance Trust Fund (parallel structure for Medicare Part A)
• 26 U.S.C. §§ 3101, 3111, 1401 — Federal Insurance Contributions Act (FICA) and Self-Employment Contributions Act (SECA) payroll-tax rates
• 2 U.S.C. § 632(a) — Budget treatment of Social Security; the concluding paragraph of subsection (a) excludes OASDI outlays and revenues from the surplus/deficit totals in the concurrent budget resolution (§ 632(a)(6) addresses OASDI outlays for Senate enforcement; § 632(i) establishes the Senate "Social security point of order")
• Social Security Act § 1817 (42 U.S.C. § 1395i) — also defines actuarial-status reporting standards

Implementing Regulations

• 20 CFR Part 404 — OASDI benefits, including PIA computation, COLA application, NRA, and earnings test
• 20 CFR Part 422 — Organization and procedures of SSA, including trust fund accounting
• 31 CFR Part 306 — General regulations governing U.S. securities (registration, transfers, redemption, interest computation, book-entry procedures applicable to Treasury obligations held by the Trust Funds). The terms of Trust Fund special-issue obligations themselves are prescribed directly by 42 U.S.C. § 401(d) (maturities and interest rate set by the Managing Trustee using market-yield methodology), not by a dedicated CFR Part

How It Works

Social Security is a pay-as-you-go program with a small accumulated reserve. Today's payroll taxes pay today's benefits; the OASI and DI Trust Funds hold the surplus from past years invested in special-issue Treasury obligations. When annual cost exceeds annual income (which has been the case since 2010 for the combined system), the funds are drawn down. Each year the Social Security Board of Trustees publishes a report projecting the system's financial status over a 75-year horizon (and a 25-year short-range horizon) using three economic and demographic scenarios — low-cost, intermediate, and high-cost. The intermediate projection is the operative scenario for policy and legislative scoring.

Two summary measures dominate the conversation:

1. 75-year long-range actuarial balance — the difference between summarized income (payroll taxes + benefit taxation + interest) and summarized cost over the 75-year valuation period, expressed as a percent of taxable payroll. The 2025 Trustees Report shows this at −3.82% (a deficit of 3.82% of payroll).
2. Annual balance in the 75th year — the year-by-year gap at the end of the projection window, indicating whether the system is on a sustainable trajectory after the 75-year period. This stands at −4.84% in the 2025 report.

A reform proposal that fully closes the long-range gap raises the long-range actuarial balance by +3.82 percentage points of payroll ("100% of shortfall eliminated"). Sustainable solvency additionally requires the 75th-year annual balance to be at or above zero with reserves stable or rising.

The trust fund depletion date is the year reserves hit zero. After depletion, the law does not authorize Treasury to lend to the trust funds — benefits would be paid only from incoming tax revenue, automatically falling to the share of scheduled benefits the inflows can cover (the payable benefit ratio). The 2025 Trustees Report intermediate projection puts OASI depletion in 2033 with 77% of scheduled benefits payable, and theoretically combined OASDI in 2034 with 81% payable. CBO's 2025 Long-Term Budget Outlook and the Trustees' high-cost (downside) scenario project depletion roughly a year earlier — OASI in 2032, combined OASDI in 2033. The exact year sensitive to economic and demographic assumptions, but the qualitative story is the same: an automatic, across-the-board benefit cut in the early 2030s absent legislation.

How It Affects You

If you're under age 50 (working-age, decades from claiming)

You face the largest tail risk. If Congress takes no action, your scheduled benefits at retirement could be reduced by roughly 19–23% across the board upon trust fund depletion in 2032 or 2033 (77% of OASI scheduled benefits payable per the 2025 Trustees Report intermediate scenario; CBO and downside scenarios project the cut a year earlier). Most reform proposals deliberately exempt current and near-retirees, so the burden of any benefit-side fix (formula change, NRA increase, COLA tweak) tends to fall on people in their 30s and 40s. Conversely, payroll-tax-side fixes (lifting or eliminating the cap, raising the rate) primarily affect higher earners and current workers.

If you're age 50–61 (near-retirees)

Most reform proposals "hold harmless" workers within ~10–15 years of NRA, so direct benefit reductions are unlikely. However, a payroll-tax-rate increase or a higher taxable maximum would affect your final earning years. If you have substantial earnings above the wage base, a "lift the cap" proposal would raise your tax bill but also (in some designs) increase your future benefit through extended bend-point credit.

If you're age 62 or older (claiming or claimed)

Reform proposals nearly universally protect existing beneficiaries from formula and NRA changes. The provisions that can affect you are: (a) COLA changes (switching to chained CPI-W — the Consumer Price Index for Urban Wage Earners and Clerical Workers, the current statutory index — or chained CPI-U, the broader urban-consumer index, typically reduces the annual COLA by ~0.3 percentage points), (b) benefit-taxation changes, (c) targeted increases for older beneficiaries (categories B5 and B6 below), and (d) post-depletion across-the-board cuts if no bill passes.

If you're a high earner (above the wage base)

You're the most directly affected by revenue-side reforms. Eliminating the taxable maximum subjects 100% of your wages to the 12.4% combined tax (vs. ~40% today for a $500K earner). The "donut hole" approach (E2.5: tax above $250K but keep the current cap) is the most-discussed bipartisan compromise — it leaves a gap between the current wage base ($184,500 in 2026) and $250,000 untaxed at the 12.4% rate.

If you're an employer

Any payroll-tax-rate increase splits 50/50 between employer and employee. A 2-percentage-point combined increase (1pp employer share) on the current taxable payroll is a meaningful labor-cost change. Provisions affecting coverage of newly hired state and local government workers, or expanding the SECA base for pass-through owners, would also shift compliance burdens.

If you collect SSDI or SSI

DI is solvent throughout the 75-year window, so depletion-driven cuts apply specifically to OASI. However, several reform provisions specifically protect or expand DI (continued benefits for student-age dependents, removed marriage-termination triggers for disabled adult children, eliminating the 5-month DI waiting period). SSI is not part of the trust fund system and is funded by general revenue.

Reform Provisions Catalog (OACT Categories A–H)

The SSA Office of the Chief Actuary publishes a periodically updated booklet — Summary of Provisions That Would Change the Social Security Program — cataloging dozens of scored reform options. The current edition (January 13, 2026) is based on the 2025 Trustees Report intermediate assumptions and groups provisions into eight categories. Each provision shows two key indicators: change in the 75-year long-range actuarial balance and change in the annual balance in the 75th year (both in percentage points of taxable payroll). All percentages below are "share of long-range shortfall eliminated" relative to the −3.82% baseline.

Category A — Cost-of-Living Adjustments

Modifying how the annual COLA is computed. Levers include reducing the COLA by a fixed amount, switching the index, or means-testing the COLA.

• A1 — Reduce annual COLA by 1 percentage point starting Dec 2026 → eliminates 51% of long-range shortfall.
• A2 — Reduce annual COLA by 0.5 pp → 27%.
• A3 — Use chained CPI-W (≈ 0.3pp lower) → 16%.
• A6 — Use CPI-E (Consumer Price Index for the Elderly) which is typically ~0.2pp higher → costs the system 11% (i.e., enlarges the shortfall by 0.43% of payroll).
• A9 — Means-test the chained-CPI-U COLA based on Modified Adjusted Gross Income (MAGI) thresholds → 37%.

Category B — Level of Monthly Benefits

Provisions reshaping the PIA formula (bend points and 90/32/15 factors), the number of computation years, the special minimum benefit for low-lifetime-earners, increases for older beneficiaries (the "longevity bump"), and other benefit adjustments.

B1: PIA factor changes — adjusting for inflation. Substituting price growth for wage growth in PIA computation.

• B1.1 — Full price-indexing of PIA factors for those newly eligible 2032+ → 74% of shortfall (the single biggest non-tax provision).
• B1.2–B1.5 — Progressive price-indexing at the 30th / 40th / 50th / 60th percentile of Average Indexed Monthly Earnings (AIME) — preserving benefits for low- and middle-earners → 41% / 35% / 29% / 22% respectively.

B2: PIA factor changes — adjusting for longevity. Reducing PIA factors as life expectancy rises.

B3: Other PIA adjustments. Includes B3.17 — raise the first bend point 22% and the 90% factor to 95% (a benefit increase) — costs 1.51% of payroll (−40% of shortfall).

B4: Computation years. Increasing the number of work years averaged into the AIME (from 35 to 38 or 40) reduces benefits by including more low-earning years.

• B4.2 — Increase to 40 years for retirees and survivors → 12%.

B5: Minimum benefits. Reconfiguring the special minimum benefit so a 30-year career at the federal minimum wage produces a PIA at or above the federal poverty level. Most variants cost the system 0.06–0.40% of payroll.

B6: Benefit increases for older beneficiaries. Adding a percentage bump to the PIA after 15–24 years of benefit eligibility, recognizing that very-old beneficiaries face higher poverty rates.

• B6.1 — 5% Monthly Benefit Amount (MBA) increase at age 85 → costs 4% of shortfall.
• B6.5 — 5% PIA increase 20 years after eligibility → costs 7%.

B7: Other benefit adjustments. Includes B7.7 (means-testing benefits above $60K single / $120K joint MAGI → eliminates 17% of shortfall) and B7.5 (5% across-the-board benefit increase → costs 21%).

Category C — Retirement Age

Modifying the Normal Retirement Age (NRA, currently 66–67), the Earliest Eligibility Age (EEA, currently 62), or both.

• C1.1 — NRA → 68, 1 month every 2 years from 2026 → 12%.
• C1.4 — NRA → 69 by 2037 (2 months/year, then 1 month every 2 years) → 36%.
• C1.7 — NRA → 69 by 2033 (3 months/year), with delayed-retirement credit and widow(er) NRA scaled accordingly → 27%.
• C2.5 — NRA → 70 by 2037, then indexed to longevity; EEA → 64 → 44%, the largest single retirement-age provision.
• C2.1 — EEA → 65, 2 months/year through 2044 → −2% (a small cost because of selection effects).

Category D — Family Members

Modifying spousal, survivor, and child dependent benefits. Most provisions individually have small actuarial effects but are policy-significant for affected populations.

• D2 — Reduce dependent spouse benefit from 50% to 33% of PIA (1pp/year phase) → 2%.
• D4 — 75%-of-combined alternative survivor benefit (improves survivor benefits for two-earner couples) → −3% (cost).
• D8 — Continue child benefits to age 26 if in school → −2%.
• D10 — End child benefits for retirees' children (preserves disabled, adopted, grandchildren) → 1%.

Category E — Payroll Taxes (Including Maximum Taxable)

The largest revenue-side category, covering rate increases (E1), full elimination of the wage base (E2), and partial taxation above the cap (E3).

E1: Increase payroll tax rate.

• E1.1 — Raise OASDI rate from 12.4% to 16.4% in 2026 → 102% of long-range shortfall (achieves full long-range solvency).
• E1.10 — Phase rate to 13.4% over 10 years (2027–2036) → 23%.

E2: Tax all earnings above the current taxable maximum.

• E2.1 — Eliminate the wage cap, no benefit credit for additional earnings → 67%.
• E2.2 — Eliminate the wage cap, with benefit credit → 48%.
• E2.5 — "Donut hole": apply 12.4% to earnings above $250,000 in 2026, leaving the gap from $184,500 → $250,000 untaxed; no benefit credit on the additional → 65%. (This is the structure most often used in bipartisan compromise drafts.)
• E2.13 — Apply 12.4% above $400,000 starting in 2027, with benefit credit via a secondary PIA formula (the threshold used in Rep. Larson's Social Security 2100 Act) → 58%.

E3: Tax a portion of earnings above the current taxable maximum.

• E3.1 — Raise the cap so 90% of covered earnings are taxed (phased in 2026–2035) with benefit credit → 22%.
• E3.14 — Eliminate the employer portion of the wage cap only → 41%.
• E3.17 — Index the cap by 2× AWI growth from 2027 (capping the gap from creeping back) → 30%.

Category F — Coverage of Employment or Earnings, or Other Sources of Revenue

Expanding the universe of earnings or income subject to OASDI, or directing other tax revenue to the trust funds.

• F1 — Cover newly hired state and local government employees in jurisdictions that currently opt out of Social Security (about 25% of the state and local workforce — primarily in CA, TX, OH, MA, IL, and a few others; the other 75% are already covered) → 4%.
• F3 — Tax employer-sponsored health insurance premiums (phasing out the employer-sponsored insurance, or ESI, exclusion) → 28%.
• F4 — Subject Cafeteria 125 / FSA contributions to OASDI tax → 9%.
• F6 — Apply a separate 6.2% tax on Affordable Care Act (ACA)-defined Net Investment Income (NII) above $200K/$250K → 18%.
• F9 — Apply a 12.4% tax on ACA-defined NII above $200K/$250K → 35%.
• F10 — Expand the NII tax to cover S-corp officers and active limited partners, with a 12.4% rate above $400K/$500K → 48%.
• F12 — Subject all pass-through distributions up to the cap to SECA tax → 4%.

Category G — Trust Fund Investment in Equities

Investing a portion of trust fund reserves in equities rather than only special-issue Treasury bonds. Provisions are scored under both an "expected return" assumption (equity premium captured) and a "risk-adjusted" assumption (no premium). Effects are technically modest because higher present-value discounting partly offsets gains.

• G1 — 40% in equities (phased 2026–2040), 5.8% real return → +0.49pp over 75 years.
• G6 — 25% in equities (phased 2028–2037), 5.8% real return → +0.31pp.
• (Risk-adjusted variants G3, G5, G7 show 0.00pp effect — the equity premium is treated as compensation for volatility, not free money.)

Category H — Taxation of Benefits

Modifying the rules under IRC § 86 that subject up to 50% (lower threshold) or 85% (upper threshold) of benefits to federal income tax, with proceeds split between OASI/DI and the Hospital Insurance (HI) trust fund.

• H2 — Tax Social Security benefits like private pensions (full inclusion above thresholds) → 5%.
• H6 — Eliminate income taxation of OASDI benefits and phase out the OASI/DI share by 2054 → −17% (a cost — would worsen the shortfall).
• H8 — Place all proceeds from benefit taxation into OASI/DI (currently a portion goes to HI) → 24%.
• H9 — Apply income tax to all benefits above $100K/$125K with revenue routed to the trust funds → 4%.

How Provisions Combine

Reform proposals typically bundle 4–8 provisions across multiple categories. The OACT explicitly notes that the sum of individual provision effects often overstates the combined effect because of interactions (e.g., raising the EEA increases the number of computation years used in PIA, partly overlapping with a separate "increase computation years" provision). A bundle that produces 100% sum-of-individual scores typically achieves 80–95% of the long-range shortfall in actual combined scoring. Sustainable solvency further requires that 75th-year annual balance be at or above zero with reserves stable or rising — not just that the cumulative balance be closed.

Pending Legislation

A short list of the major reform vehicles in the 119th Congress (2025–2026):

• Social Security Fairness Act (Pub. L. 118-273, signed January 5, 2025) — already enacted in the 118th Congress. Repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) for benefits payable after December 2023. Per the 2025 Trustees Report, this worsens the long-range OASDI actuarial balance by −0.14% of taxable payroll and pulls the OASI depletion date forward by roughly six months — a "substantial effect" by OACT's own description, achieved by removing a long-standing offset on benefits paid to former public-sector workers.
• Social Security Expansion Act (S. 770 / H.R. 1700, introduced February 27, 2025) — Sen. Bernie Sanders (I-VT) and Sen. Elizabeth Warren (D-MA) lead in the Senate; Rep. Val Hoyle (D-OR) and Rep. Jan Schakowsky (D-IL) lead in the House. Applies the 12.4% OASDI tax on earnings above $250,000 (E2.5 / E2.14 family), applies a 12.4% tax on investment income above the ACA thresholds of $200K single / $250K joint (F9 family), raises the first-bend-point PIA factor from 90% to 95% (an across-the-board benefit increase), switches the COLA to CPI-E, and lifts the special minimum benefit to 125% of the federal poverty line. Sponsors claim full 75-year solvency.
• Protecting and Preserving Social Security Act (S. 2614 / H.R. 4968, reintroduced August 2025) — Sen. Mazie Hirono (D-HI) in the Senate; Rep. Jill Tokuda (D-HI) in the House. Switches the COLA to CPI-E (A6 family) and gradually phases out the taxable-maximum cap over seven years (E2.1 family). OACT estimates the bill would extend OASDI solvency by roughly 11 years.
• You Earned It, You Keep It Act (H.R. 2909 / S. 2716, introduced April 2025) — Rep. Angie Craig (D-MN) in the House; Sen. Ruben Gallego (D-AZ) in the Senate. Eliminates federal income taxation of Social Security benefits (H6 family), offset by applying the 12.4% OASDI tax on earnings above $250,000 (E2.5 family). Note: a temporary, narrower provision — an additional standard-deduction amount for taxpayers age 65+ for tax years 2025–2028 — was enacted separately in Pub. L. 119-21 ("One Big Beautiful Bill Act"), which has reduced near-term legislative momentum on the broader Craig bill.
• Social Security 2100 Act (Rep. John Larson, D-CT) — Larson has championed this bill across multiple Congresses (most recently H.R. 4583 in the 118th). It bundles benefit increases (a 2% across-the-board PIA bump, switch to CPI-E, expanded special minimum benefit, restored child benefits to age 26) with revenue raisers (apply 12.4% to earnings above $400,000, broaden the NII tax). As of April 2026 the bill has not been formally reintroduced in the 119th Congress; Larson signaled in mid-2025 that a new version was forthcoming.

A notable vehicle from prior Congresses — the TRUST Act, which would have established bipartisan trust fund "rescue committees" with fast-track authority — has no active 119th-Congress champion: lead sponsors Sen. Mitt Romney (R-UT) and former Sen. Joe Manchin (I-WV) both left the Senate in January 2025, and the bill has not been reintroduced in this Congress.

The 119th Congress has held multiple Senate Finance and House Ways & Means hearings on solvency in 2025–2026, but no comprehensive reform bill has advanced to the floor of either chamber.

Recent Developments

• 2025 OASDI Trustees Report (June 2025) — Theoretical combined OASI+DI depletion projected for 2034 (intermediate assumptions; one year sooner than the 2024 Report), with 81% of scheduled benefits payable at that point. OASI alone projected to deplete in 2033 with 77% payable. CBO's 2025 Long-Term Budget Outlook and the Trustees' high-cost scenario project these dates one year earlier (OASI 2032, combined 2033) — readers should treat the cut as falling somewhere in the 2032–2033 window depending on which assumptions hold. DI alone remains solvent throughout the 75-year horizon (trust fund ratio rising from 108% in 2025 to 777% by 2099). Long-range actuarial deficit widened to −3.82% of payroll (from −3.50% in the 2024 Report), with the Social Security Fairness Act (SSFA) WEP/GPO repeal accounting for −0.14pp of the change.
• OACT Provisions Booklet (January 13, 2026) — Updated edition based on 2025 Trustees Report intermediate assumptions; this is the canonical reference for scoring solvency provisions and the basis for the categories A–H summary above.
• Social Security Fairness Act enacted (P.L. 118-273, January 5, 2025) — repealed WEP and GPO. SSA has been processing retroactive payments and benefit recalculations for affected former public-sector workers throughout 2025–2026 (see the Social Security WEP-GPO repeal page).
• 2026 COLA = 2.8% (announced October 24, 2025; effective with December 2025 benefits). 2026 wage base announced at $184,500 (up from $176,100 in 2025).
• 2026 OASDI Trustees Report — typically released April–June; will incorporate any policy changes since the 2025 report and updated demographic and economic assumptions.

Related Pages

• Social Security Administration — operational structure, budget, customer service backlogs
• Social Security Benefit Formula — PIA, bend points, AIME mechanics
• Social Security COLA — annual cost-of-living adjustment (Category A reform target)
• Social Security Wage Cap — taxable maximum (Category E reform target)
• Social Security Benefit Taxation — IRC § 86 (Category H reform target)
• Social Security Claiming Strategies — when to start benefits given solvency uncertainty
• Social Security Earnings Test — how earnings reduce benefits before NRA
• Social Security WEP-GPO Repeal — the 2025 SSFA enactment
• SSDI Disability Benefits — DI side of the trust fund
• SSI Supplemental Security Income — separate program funded by general revenue, unaffected by trust fund depletion
• Federal Budget Process — off-budget treatment of OASDI and the appropriations interaction

Primary Sources

• SSA Office of the Chief Actuary, Summary of Provisions That Would Change the Social Security Program (Jan 13, 2026 edition; based on 2025 Trustees Report intermediate assumptions): https://www.ssa.gov/oact/solvency/provisions/summary.pdf
• SSA OACT individual provision tracker: https://www.ssa.gov/OACT/solvency/provisions/index.html
• 2025 OASDI Trustees Report: https://www.ssa.gov/OACT/TR/2025/
• SSA Social Security Fact Sheet (2026 numbers): https://www.ssa.gov/news/press/factsheets/colafacts2026.pdf
• CRS Reports R47306 (Social Security: Trust Fund and Solvency Issues) and RL33514 (Social Security Reform: Current Issues and Legislation)