How Much Social Security Can Really Be Paid If It Runs Out

Social Security has been on a lot of people's minds lately, and it's easy to understand why. From the negative impact many of Donald Trump's proposed policies could have on beneficiaries, to the program's upcoming funding cliff, the future of Social Security is looking bleak. While in the short term, a loss of Social Security funding could affect Baby Boomers (and soon, Gen X) who might rely on those benefits during retirement, the long-term impact of Social Security's funding shortfall could be most extreme for younger generations. This is especially true when you consider potential policy changes that could affect the program in the future, and part of why it is so important for younger generations to care about Social Security.

While it can be easy to simply assume that Social Security is only for retirees, and therefore only a small part of all federal programs, understanding the actual scale and scope of who receives Social Security benefits can be particularly important when it comes to understanding how serious Social Security's current predicament is. As of June 2024, an average of 68 million Americans received some kind of Social Security benefit every month. While these benefits included retirement they also included disability and survivor benefits. In fact, a total of $1.5 trillion was paid in benefits in 2024. For retirees, in particular, these benefits can be a significant source of income. Almost nine out of every 10 people aged 65 and older receive Social Security benefits, with these benefits representing roughly 30% of all income for those over 65.

For starters, Social Security currently operates on a combination of two major trust funds (with the interest these funds earn) and what is collected from payroll taxes every year. The two trust funds, the Old-Age and Survivors Insurance (OASI) Trust Fund and Disability Insurance (DI) Trust Fund are what is at risk of running out. According to the Social Security and Medicare Boards of Trustees, as of May 2024, the OASI Trust Fund (which is what pays out benefits for retirees) will only be able to pay 100% of its total scheduled benefits until 2033. Once the reserves for the OASI funds are depleted, the payroll tax income for the program would only be able to support paying out roughly 79% of scheduled benefits.

In December 2024, the Social Security Administration reported that the average monthly benefit amount from the OASI Trust Fund was $1,889.09. This means that, as of 2033, beneficiaries would only receive $1,492.38. It's worth mentioning that the DI Trust Funds are currently on track to run out of funds in 2098. With that in mind the combined OASI Trust Fund and DI Trust Fund would be able to pay 100% of total scheduled benefits until 2035 (it's important to realize these two funds are not legally able to be combined, but the combined deadline gives a better general sense of Social Security's financial status). Once both funds are depleted, Social Security would only be able to pay 83% of its scheduled benefits to beneficiaries across all programs.

The current projections for when Social Security's funds might run out can, and do, regularly change. For instance, in 2023 the Social Security Administration anticipated its funds becoming depleted an entire year earlier than reported in 2024. Similarly, it's also important to realize how current economic policies can speed up or slow down the eventual depletion of Social Security's funds. While topics like immigration, eliminating taxes on overtime and tips, and even tariffs might not seem like they have much to do with Social Security, they can all impact the time Social Security has left before hitting insolvency.

According to an October 2024 report from the Committee for a Responsible Federal Budget, many of Donald Trump's proposed economic policies would serve to not only speed up Social Security's insolvency by three entire years, but also lead to an overall increased benefits rate cut when its funds do run out. According to this analysis, Trump's policies would lead to a 33% across-the-board cut in all benefits (meaning beneficiaries would receive just 67% of their scheduled benefits). These estimates are based on the economic toll of inflation-increasing policies such as imposing tariffs (we broke down what these are, and how consumers inevitably pay for them), and implementing mass deportations that could lead to lower national income and generally lower employment. Plus, since many undocumented immigrants in the U.S. actually contribute to Social Security through payroll taxes, these mass deportations could also serve to lower the annual payroll income that Social Security relies on.