By Edward Cates, Chairman, TSCL
If you’re a regular Advisor reader, you already know that Social Security has money problems: Because the agency pays out more in benefits than it brings in via tax revenue every year, it is on track to pay retirees’ Social Security benefits in full through 2033. At that point, the agency will be forced to reduce benefits by 23 percent unless Congress acts.
And according to a new report from the Social Security Administration’s (SSA’s) Office of the Chief Actuary, the runway to solve this problem just got a bit shorter.
The SSA’s 2025 Trustees Report, an annual report that presents the current and projected financial status of the trust funds that make up Social Security, anticipates that the fund that pays out retirement benefits is expected to be depleted approximately three calendar quarters sooner than projected in last year’s report. This means that even though the depletion date still falls in 2033, it will now come much sooner in the year.
The SSA says that the program’s long-term finances deteriorated over the last year due to three major factors: The passing of the Social Security Fairness Act, a longer projected recovery from historically low fertility rates, and an expected reduction in the share of gross domestic product (GDP) that ends up in workers’ pockets.
First, the Social Security Fairness Act was recently passed. While this will allow public workers like teachers and firefighters to receive more of the benefits they’re owed, it will strain the program’s finances. Second, global fertility rates are falling, meaning fewer people will be paying into Social Security through payroll taxes. Third, a smaller share of the U.S. economy is going to workers' wages, so Social Security collects less in payroll taxes.
So, if the SSA can’t affect the macroeconomic problems behind its financial pain, what needs to happen? The answer is simple: Congress needs to pass new legislation that ensures the program continues to pay full benefits while restoring its financial integrity for future generations.
Congress already has a track record of pulling this off. Back in 1983, Social Security faced a similar problem to today’s: If Congress didn’t act quickly, the SSA would have had to reduce benefits. Bipartisan support for reform emerged, and Congress managed to pass a law that introduced taxes on benefits for high earners, gradually raised the retirement age, and pushed cost-of-living adjustments back from July to January of each year.
However, the American public would like to see the process go differently this time. Instead of waiting until the last minute, as in 1983, we’re calling on Congress to get in front of the problem and pass Social Security reform now. Our research at TSCL consistently shows that seniors support eliminating the loophole that lets high earners stop paying taxes toward Social Security (on income above $176,100 in 2025), which would improve the program’s finances. Another policy that has seen support in our polling would be to institute a capital gains tax among high earners to fund the program.
At TSCL, we’re pushing to get these reforms passed now instead of when Social Security is in crisis mode. And you can help with that effort. Looking ahead to the 2026 midterms, it will be essential to get candidates for Congress on the record about what policies they support to reform Social Security. We must start applying pressure now, through letters to our representatives, participation in town halls, and our political donations. Change will only come if we speak up for ourselves.
