Here’s Why Your Social Security Benefit Could Shrink by $458 in 6 Years

Social Security benefits are a crucial income source for most retirees. Unfortunately, retirees could soon face a major financial shortfall. That’s because the average retirement benefit is on track to shrink by $458 if something doesn’t change.

Here’s why retirees risk losing benefits, along with some potential solutions that could prevent this disasterous outcome from occurring.

Seniors could lose thousands as early as 2032

Seniors face a substantial risk of losing benefits as a result of automatic cuts that could become necessary if Social Security’s trust fund runs dry.

The June 2026 Trustees Report from the Social Security Administration has made clear that the depletion of the trust fund is not something that’s going to happen in the distant future. The money will be gone in less than a decade.

Specifically, the Old-Age and Survivors Insurance Trust Fund (OASI) is expected to be depleted as early as 2032, while if the OASI trust fund is combined with the Disability Insurance trust fund, the trust fund is expected to run out as early as 2034.  If the funds are not combined and the money in the trust fund is gone in 2032, Social Security will have only enough money to pay 78% of promised benefits.

Since the average benefit in 2026 is $2,083, a 22% reduction would result in the typical retiree seeing their benefit shrink by $458.26 per month or $5,499.12 per year. This is an enormous amount of money for seniors to lose, particularly since many retirees depend on Social Security as a substantial source of their income, since far too many Americans don’t have enough retirement savings.

Why will the automatic benefit cuts happen, and what can be done?

Benefit cuts would become necessary in 2032 if the trust fund is depleted because Social Security is only allowed to pay benefits out of the trust fund and the revenue it collects. It cannot print money or borrow money from the general fund.

Since revenue will still come from current workers and from retirees who pay tax on their benefits, Social Security will not be bankrupt. But the revenue being collected only provides enough to pay 78% of the benefits, which is why the 22% cut would have to occur.  The only way to stop this is for lawmakers to take action and shore up Social Security’s finances.

There are a number of potential ways that lawmakers could do that, including:

• Raising the payroll tax used to fund Social Security so more revenue is collected both now and in the future. This could help the trust fund last longer and provide more money to pay benefits.
• Cutting Social Security benefits in some way. This could be an indirect cut, like slowing the pace of cost of kiving adjustments so retirees don’t see their benefit increase as much due to inflation or changing full retirement age until a later date so people have to wait longer to claim benefits to avoid early filing penalties.

Unfortunately, all of these options are politically painful, and the longer lawmakers wait, the harder it will become for them to find a fix since Social Security’s finances will become worse in the meantime. Retirees need to be aware that these cuts could be coming and that there’s no easy solution. While it is likely Congress will do something, exactly what will happen is unclear — and that should make every retiree very nervous.

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