Social Security Faces Its Biggest Overhaul in Decades - Here's When

"The Social Security Old-Age and Survivors Insurance (OASI) Trust Fund, which is where retirement benefits are paid from, only has enough reserves to pay 100% of scheduled benefits through 2033. Once the OASI Trust Fund is depleted, retirement benefits could face a 23% cut. The Social Security Disability Insurance (DI) Trust Fund, meanwhile, can pay 100% of scheduled benefits on its own through at least 2099."

"If the OASI and DI trust funds were to be combined, Social Security would be able to pay 100% of scheduled benefits through 2034. But from there, benefits could face a 19% cut. That sort of cut could be catastrophic to the people who rely heavily on Social Security for income. So it's in lawmakers' best interest to try to prevent that from happening."

The OASI Trust Fund has enough reserves to pay scheduled retirement benefits only through 2033, after which scheduled retirement benefits could face a roughly 23% reduction. The DI Trust Fund can independently fund scheduled disability benefits through at least 2099. Combining OASI and DI would permit full scheduled payments through about 2034, but reserves would still fall short thereafter, possibly requiring a near 19% cut. Such cuts would severely affect beneficiaries who rely heavily on Social Security for income. Potential policy responses include combining trust funds and adjusting payroll-tax rules, including the 12.4% tax rate and the wage cap.

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