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The Social Security Trustees’ 2026 Report has been out for a month now, but few people in the press, let alone the public, are aware that it’s in far worse shape than the headline summary — that it will need to cut the benefits of all 70 million-plus beneficiaries in 2032 by 22 percent. That’s the date at which the System’s so-called Trust Fund — its checking account — will run dry. At that point, payroll taxes will be the System’s only source of funds to pay benefits. And, in 2032, those revenues will cover only 78 of schedule benefits.
But, as I described here, the System’s true fiscal insolvency is disclosed in Table VI.F1, which is buried 224 pages into the 273-page report. The table, which is hard to decipher and ignored entirely in the Trustees’ Overview, shows that the System needs a 31 percent permanent cut in benefits, not a 22 percent cut, starting immediately, not in 2032, to preclude an even larger benefit cut—greater than 31 percent—farther down the road. Alternatively, we can immediately and permanently raise the Social Security FICA OASDI payroll tax rate from its current 12.4 percent value to 18.1 percent. This would suffice, given current estimates, to ensure that Social Security’s payroll tax rate never needs to rise above 18.1 percent.
In short, Social Security is extremely far up the creek with no paddle. In this podcast, fabled financial journalists Richard Eisenberg, Pam Krueger, and Terry Savage, and I discuss Social Security’s financial black hole and what can be done to plug it. In my view, things are too far gone to consider anything but radical surgery as proposed here.
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Richard Eisenberg is an American journalist specializing in retirement and personal finance. He served as Managing Editor for Money & Security and Work & Purpose at Next Avenue, where he wrote extensively about retirement, aging, careers, and financial planning. Eisenberg is also a former Executive Editor of Money magazine and is a frequent commentator on retirement issues in national media.
Pam Krueger is a financial journalist, television host, and investor advocate best known as the creator and co-host of the public television series MoneyTrack. She is the founder and CEO of Wealthramp, a service that helps consumers find independent, fee-only financial advisors who meet rigorous screening standards. Krueger is widely recognized for promoting fiduciary financial advice and educating investors about avoiding conflicts of interest.
Terry Savage is an American personal finance expert, syndicated newspaper columnist, and television commentator. She is the author of several bestselling books on investing, retirement, and personal finance, including The Savage Truth on Money. Savage is known for making complex financial topics accessible to the public and is a frequent speaker on investing, Social Security, retirement planning, and consumer finance.
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If social security is in deep trouble, what about all the trillions being dumped into the fed deficit by the big boondoggle bill? Wouldn’t that go much farther than fixing social security?
The buried $71.9T number is the story here, and you’re right to be angry about where they put it. But I’d push the diagnosis one layer deeper. Pay-as-you-go didn’t fail because of bad management. It failed because it quietly assumed something biology forbids: that the working base can grow forever. No species escapes carrying capacity, and no pension system built on permanent population growth does either. The 2032 date isn’t a fiscal event. It’s an ecological law finally catching up with an actuarial promise.