New report predicts major Social Security crisis is imminent
A new projection by Penn Wharton Budget Model says Social Security closer to insolvency than previously thought.
As we await the 2026 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, a new analysis projects that Social Security in the United States is just six years away from insolvency.
Every year, the Social Security Administration (SSA) releases a report detailing the financial health of the Social Security program. In 2025, the agency projected that the Old‑Age and Survivors Insurance (OASI) Trust Fund would only be able to pay full benefits through 2033.
According to last year’s report, the trust fund’s reserves would become depleted in seven years’ time, and ongoing program revenue would be enough to cover only 77% of scheduled benefits.
Social Security now on track for 2032 depletion
As of early 2026, the SSA has not yet released its official report, but a new analysis from the Penn Wharton Budget Model (PWBM) projects that the Old‑Age and Survivors Insurance Trust Fund is heading toward depletion one year earlier than the SSA previously projected.
“Under current law, we project that the Social Security OASI (Old-Age and Survivors Insurance) Trust Fund will be depleted in 2032,” the report, released on March 19, states. “If OASI and DI (Disability Insurance) are treated as a combined, pooled trust fund, depletion occurs two years later, in 2034.”
According to PWBM, if the funds are combined, payable benefits would drop to 83% of scheduled levels in 2034 and continue declining, reaching 64% by 2100 - the end of the 75‑year projection window.
The SSA is expected to release its 2026 OASDI Trustees Report in the coming months.
We project that Social Security's OASI Trust Fund will deplete in 2032. We consider five reform options that vary in the amount of tax increases and benefit cuts and show how traditional analysis yields very different — even opposite — implications from more comprehensive… pic.twitter.com/3nyrCWuH5f
— Penn Wharton Budget Model (@BudgetModel) March 19, 2026
Why are Social Security’s trust funds running out?
In its 2025 report, the SSA noted that the program’s financial outlook worsened due to three major factors. First, the Social Security Fairness Act, passed in early 2025, granted retroactive payments to certain beneficiaries. Second, trustees expect the nation’s fertility rate to take longer to rebound from historically low levels. And third, average wage growth is projected to slow over the next decade.
How to “save” Social Security
Congress will ultimately have to step in to prevent trust‑fund depletion. Lawmakers have several options to reduce - or even eliminate - the long‑term funding gaps facing Social Security.
Even though depletion is still several years away, policymakers stress that action is needed now to ensure beneficiaries continue receiving full payments.
Among the options on the table: raising the payroll tax rate, amending the cap on wages subject to Social Security taxes, raising the full retirement age, or reducing annual cost‑of‑living adjustments (COLA).
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