Social Security, Medicare insolvency dates move up to 2033

The main trust funds for Social Security and Medicare will run out of money in 2033, and the government will have to slash benefit payments at that point, the programs’ trustees said Wednesday in the latest warning about the nation’s most extensive social welfare safety net.

That timetable marks a significant worsening for Medicare. A year ago, its Hospital Insurance Trust Fund was expected to last through 2036.

Social Security’s depletion date ticked forward less than a year, but the trustees said it was also in worse shape than last year.

Without changes to the law or an unexpected improvement in finances, Social Security checks must be cut by 23% in 2033. Medicare payments would need to be trimmed by 11% of expected benefits.

“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare,” the trustees said.

The Social Security and Medicare programs focus heavily on older Americans, and ongoing demographic trends of an aging population make their long-term finances dubious.

From 1974 to 2008, the programs had at least 3.2 workers for every beneficiary.

That started to change during the Great Recession, which pushed Americans out of the workforce as baby boomers began to retire en masse. Meanwhile, fertility rates fell to an all-time low of 1.62 in 2023 and 2024.

The trustees said the ratio will decline to 2.3 workers per beneficiary in 2040.

Social Security’s main trust fund is the Old Age Survivors Insurance program. Its secondary fund is the Disability Insurance program, which has a longer insolvency time frame, though analysts often consider them together in what is called the unified trust funds.

Social Security has been operating on a cash-flow deficit since 2009 and has been covering the shortfall, in a fiscal sense, by tapping into the trust funds.

Together, they collected $1.293 trillion in new taxes in 2024 and paid out $1.471 trillion in benefits. The combined trust funds peaked at $2.908 trillion in 2019 and fell to $2.721 trillion last year.

The trustees release an annual update that analyzes demographics, finances and spending trends to evaluate the two funds’ performance. Sometimes, the insolvency date ticks forward, and sometimes, it slips back.

The trustees blamed this year’s Medicare change on an “upward revision” in near-term spending projections. In particular, they expect higher inpatient and hospice care.

For Social Security, the big change was Congress and President Biden, who enacted a law expanding benefits for some retirees who also had pensions. It essentially covers federal, state and local employees whose pensions weren’t subject to Social Security tax, and who, until this year, didn’t receive benefits.

“As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues,” the trustees said.

That call has done little to prod a reluctant Congress.

Republicans are pushing to pass a massive budget bill that cuts taxes and imposes limits on other safety net programs, but President Trump has said Social Security is not to be touched.

Whichever party attempts to change Social Security or Medicare faces vicious political attacks, preventing Capitol Hill from proposing the tax increases and benefit cuts that experts say are needed to restore the programs to their former strength.

Indeed, the Social Security pensions change, overwhelmingly approved by a bipartisan Congress last year and signed by Mr. Biden, signals that lawmakers are more comfortable deepening the fiscal problems.

Experts said the latest reports should force a rethink.

“The program is barreling toward insolvency — and fast,” said Romina Boccia and Ivane Nachkebia, writing in their Debt Dispatch newsletter.

They said other nations that acted before the crisis point were able to preserve the core of their safety net programs.

“It’s not too late for the United States to follow the course. But the window is closing,” they said.

Nancy Altman, president of Social Security Works, said she saw good news in the report.

“There is a modest funding shortfall, which is still years away. There is no question Congress will act to avert the shortfall, as it always has in the past,” she said in an email to supporters.

She said the only viable option is higher taxes to cover that shortfall.

“Any politician who doesn’t support increasing Social Security’s revenue is, by default, supporting benefit cuts for Americans who have paid into the program their entire working lives,” she said.

Washington officials on both sides of the aisle insisted the report backed up the policies they want to see.

Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said Congress should go after insurance companies that he said drive up Medicare costs by overcharging the federal government.

Treasury Secretary Scott Bessent, meanwhile, made a pitch for Mr. Trump’s demand to squeeze out “waste, fraud and abuse” from the programs.