A 22% Benefit Cut? Why Social Security’s Future Is Back in the Spotlight

Although a financially sound retirement often hinges on a combination of savings and Social Security, many older Americans lack the former.

A recent AARP survey found that 20% of Americans ages 50 and over have no savings whatsoever. And even more recently, the nonpartisan Senior Citizens League found that 44% of seniors get 100% of their income from Social Security.

It’s numbers like these that make the idea of Social Security cuts so scary. But unfortunately, that’s where the program may be headed if Congress does not intervene.

Social Security faces sweeping cuts

The Social Security Trustees recently released an update on the state of the program’s finances. And it found that the Old-Age and Survivors Insurance (OASI) Trust Fund is expected to run dry in 2032.

The OASI Trust Fund is the fund retirement benefits are paid from. And once it’s depleted, Social Security could face widespread benefit cuts.

Now if the OASI Trust Fund is combined with Social Security’s Disability Insurance Trust Fund, the program should be able to keep up with benefits through 2034. But that’s a change lawmakers would have to vote on.

If that doesn’t happen, Social Security could be looking at a 22% benefit cut in 2032. That would clearly be catastrophic for the millions of seniors who get most or all of their income from the program.

As of May 2026, the average monthly Social Security retirement benefit is about $2,083. A 22% cut would reduce that benefit to $1,625.

Put another way, with a 22% cut, the typical retiree on Social Security would lose about $458 per month, or roughly $5,500 a year.

As it is, many Social Security recipients struggle to keep up with rising costs. If benefits were to be reduced by 22%, millions of seniors would be pretty much guaranteed to not have enough money to keep up with even their basic needs.

Will Congress really let Social Security cut benefits?

That’s the big question. Although Social Security faces benefit cuts, they’re not guaranteed to happen.

Lawmakers know that allowing sweeping cuts could produce a massive poverty crisis among retirees. And that’s clearly something they’re not looking to have on their hands.

Also, Social Security has faced the possibility of benefit cuts before. And so far, they’ve always been preventable. In fact, a big reason some seniors face taxes on their Social Security benefits today is that lawmakers voted that change in decades ago to bail the program out of a similar financial crisis.

Unfortunately, though, Americans may be looking at an even more painful change to prevent benefit cuts this time around. While taxes on benefits are a blow to retirees, only a portion of seniors have to pay those taxes on their Social Security checks. The changes lawmakers implement in the coming years to save Social Security from cuts could have broader repercussions.

For example, one commonly floated solution is to raise Social Security’s payroll tax rate. That would burden workers and employers alike with higher taxes.

Another option is to increase full retirement age for Social Security. But that could force current workers to remain employed longer or force them to accept reduced benefits if they want to retire on time.

It’s important to prepare for changes

While Social Security certainly faces the possibility of a 22% benefit cut, it’s not guaranteed. But it’s a good idea for retirees and workers alike to shore up their finances and try to build or boost savings in case cuts somehow aren’t preventable this time around.

The more likely scenario, though, is that a big legislative change comes through to prevent massive cuts. But that’s also something Americans will have to prepare for. And until we know what the solution is, that’s hard to do. The best thing, therefore, is to stay on top of the news and pay attention to Social Security updates.