Social Security trust fund projected to be depleted by 2034

The Social Security trust fund is now projected to be depleted by 2034, according to the Social Security Administration’s (SSA) 2025 annual report—one year earlier than previously forecast.

The revised projection indicates that starting in 2035, beneficiaries will receive only 81% of their scheduled payments unless corrective measures are taken. The estimate reflects growing financial strain on the system, driven by factors such as increased public-sector wages, declining birth rates, and reduced payroll tax revenue.

The Old-Age and Survivors Insurance (OASI) trust fund, which supports retirement and survivor benefits, is expected to be exhausted by 2033. That marks a three-quarter-year acceleration from last year’s forecast. If no reforms are enacted, payments under this program will drop to 77% of promised benefits beginning in 2034.

The Medicare Hospital Insurance Trust Fund is also facing accelerated depletion. It is now projected to run out by 2033, three years earlier than previously reported. At that point, Medicare benefits would cover only 89% of expenses.

In contrast, the Disability Insurance Trust Fund remains financially sound, with full benefit payouts expected to continue through 2099.

According to the SSA report, several factors are contributing to the earlier depletion timeline. These include rising payroll costs from changes under the Social Security Fairness Act, delayed recovery in birth rates until the 2040–2050 period, and a shrinking share of labor income subject to taxation.

CNN and other outlets noted that these trends are placing sustained pressure on federal social safety net funding.

To address the shortfall, several policy options have been proposed. These include raising the payroll tax rate from its current 12.4%, reducing benefit levels, or reallocating funds across various trust programs.

BY HYOUNGJAE KIM  [kim.ian@koreadaily.com]