Social Security’s main retirement trust fund will run dry in the fourth quarter of 2032 — several months earlier than previously forecast — leaving retirees facing a 22% benefit cut unless Congress acts, according to the program’s annual trustees report released this month.
The Old-Age and Survivors Insurance trust fund pays monthly checks to millions of retired workers, their spouses and children, and survivors of deceased workers. Once depleted, the program will only be able to pay 78% of scheduled benefits from incoming payroll taxes alone.
Bipartisan Push to Tax High Earners
The accelerated timeline has sparked an unusual alliance. Sens. Elizabeth Warren, D-Mass., and Bernie Moreno, R-Ohio, announced Tuesday they’re working together on legislation to lift the payroll tax cap that currently shields high earners from contributing to Social Security on their full income.
Under current law, only the first $184,500 in earnings is subject to Social Security payroll taxes. Workers stop paying into the system once they hit that threshold each year, while middle-class families pay the 6.2% tax on every dollar they earn.
Americans earning $1 million annually already stopped paying Social Security taxes on March 9 of this year, according to the Center for Economic and Policy Research. For the remaining nine months of 2026, those high earners contribute nothing to a system that covers 67 million beneficiaries.
What Depletion Means for Current Retirees
The 2032 deadline represents the point when Social Security can no longer pay full benefits from its reserves. The program would continue operating on incoming tax revenue, but checks would immediately shrink by more than one-fifth.
For someone receiving the average monthly benefit of $1,907, depletion would mean a cut of roughly $420 per month — $5,040 annually. Benefits would continue at that reduced level indefinitely unless Congress intervenes.
The trustees report shows Social Security’s financial position worsening faster than anticipated. Last year’s projection put the depletion date in early 2033, giving lawmakers an extra few months they no longer have.
Warren and Moreno’s proposal faces steep challenges in a divided Congress, where Republicans have traditionally opposed tax increases and some Democrats resist changes that don’t also address benefit levels. The clock now shows six years and four months until automatic cuts begin.
Key Points
- Social Security’s retirement trust fund depletes fourth quarter 2032, months earlier than forecast, cutting benefits to 78% of scheduled amounts
- Warren and Moreno propose ending payroll tax cap at $184,500, forcing high earners to contribute on full income like middle-class families do
- Americans earning $1 million stopped paying into Social Security on March 9 this year, contributing nothing for remaining nine months
https://www.cnbc.com/2026/06/25/social-security-why-some-washington-lawmakers-want-to-tax-high-earners.html – June 25, 2026
