Social Security’s reserves could vanish in eight years, roughly on par with previous estimates, according to a new report. At that point, if no adjustments are made, the entitlement program’s trust fund will be able to pay out just 77% of benefits to seniors.
Medicare is in the same boat.
That’s the latest projection for the Old-Age and Survivors Insurance (OASI) Trust Fund, according to the 2025 Social Security and Medicare Trustees annual report released Wednesday.
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Is there any hope? Only if Congress gets its act together and makes some fixes, which are doable. “A huge number that lawmakers have allowed this to run out of control — but it doesn’t change the fact that we have the tools we need to address this problem and turn the ship around,” Emerson Sprick, an economist and associate director of the Economic Policy Program at the Bipartisan Policy Center, told Yahoo Finance.
Some slightly good news: If the OASI were combined with the fund that pays out disability benefits — the Disability Insurance Trust Fund — the reserve fund would not go broke until the third quarter of 2034, three quarters sooner than reported last year, and it would shell out 81% of scheduled benefits.
However, the two funds can’t be combined, at least for now. The combined projection of the two funds is frequently used to indicate the overall status of the Social Security program.
But the situation is worse than you think. “Since last year’s report, one law was enacted that is projected to have a substantial effect on Social Security’s financial status — The Social Security Fairness Act was enacted on January 5th, 2025,” said a senior government official.
Read more: What is the retirement age for Social Security, 401(k), and IRA withdrawals?
This law, the Social Security Fairness Act, impacts more than 3 million Social Security recipients by increasing monthly benefits for certain types of workers, including some teachers, firefighters, and police officers in many states, federal employees covered by the Civil Service Retirement System, and people whose work had been covered by a foreign social security system.
“Although it’s not reflected in the projected year of trust fund depletion, the report shows clearly that Social Security’s financial outlook has worsened over the last year, mainly due to the enactment of the act,” said Sprick, the economist.
The Medicare Hospital Insurance trust fund will also exhaust its reserves in 2033, three years earlier than projected last year, primarily due to the change in projected expenditures.