Overview

• A June 18 trustees report warns that Social Security reserves will be exhausted by 2034 if no legislative changes are made, moving the depletion date up by a year from last year’s estimate
• Medicare’s hospital insurance fund is now set to run dry in 2033 after 2024 hospital spending outpaced prior forecasts
• Without an overhaul, automatic reductions would slash Social Security benefits by about 23% and Medicare hospital coverage by roughly 11% in 2033
• Trustees cited factors such as a bipartisan late-term benefit increase for 3 million retirees, slower wage growth, and delayed gains in birth rates as drivers of the shortfall
• Experts urge a combination of solutions—like raising the payroll tax cap for high earners or adjusting benefit formulas—to restore long-term solvency