WASHINGTON (AP) — The retirement trust fund for Social Security is projected to face a funding shortfall in 2032, one year earlier than previously estimated, according to an annual report released Tuesday by the program's trustees. Meanwhile, Medicare's hospital insurance trust fund is expected to be unable to pay full benefits by 2033, a date unchanged from last year's projection.
Rising healthcare costs and increased government spending have contributed to the accelerated depletion timeline for Social Security, now less than a decade away. The report emphasizes that the looming challenge is a partial funding gap, not a complete collapse.
Even after the trust funds are depleted, the system will continue to issue benefits, though at reduced levels. Last year, Medicare's hospital insurance trust fund depletion date was pushed to 2033 from 2036, reflecting improved projections at that time.
Social Security's combined trust funds, covering both old-age and disability recipients, will be unable to pay full benefits starting in 2034, unchanged from the 2025 report. After that point, incoming revenue would cover approximately 83% of scheduled benefits.
Social Security Commissioner Frank Bisignano stated that the Trump administration is "committed to protecting and strengthening Social Security" and focused on "eliminating waste, fraud, abuse and ensuring program integrity." The trustees, which include the Treasury Secretary, Labor Secretary, Health and Human Services Secretary, and the Social Security Commissioner, noted that the latest findings underscore the urgency of making necessary changes to the programs, which have faced dire financial projections for decades. However, altering these popular programs has long been politically challenging, and lawmakers have repeatedly deferred action.
AARP CEO Myechia Minter-Jordan called the latest numbers "a wake-up call" and urged Congress to act. "Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire," she said.
"No family should see any cuts to what they've earned in Social Security." Currently, about 1 million people are enrolled in Medicare, the federal health insurance program for those aged 65 and older, as well as individuals with severe disabilities or illnesses. Social Security benefits were last reformed approximately 40 years ago, when the eligibility age was raised from 65 to 67.
The eligibility age for Medicare has remained at 65 since its inception.