Social Security trust fund to run dry by 2032
Social Security’s trust fund is projected to run out of reserves in 2032, triggering automatic 22% benefit cuts unless Congress passes reforms beforehand.
The program is facing a major financial crisis, with payroll tax revenue unable to cover benefits in full after 2032.
Lawmakers are considering several fixes, including raising the 12.4% payroll tax rate, which would reduce workers’ take-home pay and raise employer labor costs, with potential cuts potentially pushing many older Americans into poverty, with workers able to soften the blow by boosting traditional IRA or 401(k) contributions to lower taxable income, with some retirees relying on Social Security for $184,500 or more in lifetime benefits.