Social Security beneficiaries in the US could face a 22% cut in their retirement and survivor benefits in 2032 if Congress does not take action to address the program’s funding problems, according to the Committee for a Responsible Federal Budget (CRFB).
Medicare Part B generally helps cover outpatient medical services, including doctor visits. The program would still receive money through ongoing income, mainly payroll taxes, even after its reserves are depleted, according to the Social Security trustees’ 2026 report. However, this income would be enough to cover only about 78% of scheduled retirement and survivor benefits if lawmakers do not change the law. The 22% cut is a projection of the possible reduction, not a cut that has already been announced. Meanwhile, the Social Security Administration announced a 3.6% COLA increase for 2027 on Wednesday. The adjustment will raise the average monthly retirement benefit by about $75, from $2,095 to $2,170, according to estimates cited by AARP. Healthcare costs could also rise in 2027. The standard Medicare Part B premium is projected to increase by $6.60 per month to $209.50, according to AARP.
The projected shortfall means beneficiaries could face an automatic reduction in their payments if Congress fails to find a solution before the trust fund runs out of reserves.
At the same time, the retirement trust fund faces a projected funding gap, raising questions about how the government will balance the needs of current retirees with the cost of future benefits. Because payroll taxes collected from current workers help fund the program, younger workers are also directly connected to Social Security’s financial future.
