The trust funds that support Medicare and Social Security—a financial backbone for nearly 70 million Americans—are at serious risk of insolvency within the next seven years, threatening to slash benefits by up to 24% for retirees unless legislative action is taken immediately. For a typical couple turning 60 this year, this could mean a staggering loss of approximately $18,400 in Social Security benefits annually, according to the Committee for a Responsible Federal Budget (CRFB), one of Washington DC’s top nonpartisan budget watchdogs.
Financial projections from both program trustees and the Congressional Budget Office (CBO) paint an alarming picture, the CRFB says: the trust funds that finance Social Security’s retirement program, Medicare’s hospital insurance, and the Highway Trust Fund will all be depleted by or before 2032.
Specifically for Social Security, projections indicate that the retirement trust fund will be depleted in late 2032, with the combined retirement and disability trust funds exhausting their reserves by 2034. Medicare’s associated hospital insurance fund faces a similar fate, with policymakers now estimating insolvency by 2032 as well.
What happens when the money runs out?
