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2d ago

Trustees Warn of 2034 Fund Depletion and 19% Benefit Cut

Proposals to raise the payroll tax to 16.05 percent or higher would saddle new labor-force entrants with six-figure lifetime burdens.

he Social Security Administration office in Brownsville.
Illustration: Sarah Grillo/Axios
Stock image/file photo: U.S. Dollars with a Treasury check.
People rally as part of a nationwide "Hands off Social Security!" protest outside the U.S. Social Security Administration in Brooklyn, New York City, U.S., April 15, 2025.

Overview

  • The Social Security Trustees project the combined OASI and DI funds will be exhausted in 2034, triggering an automatic reduction of scheduled benefits to 81 percent.
  • To maintain scheduled benefits over 75 years, the trustees calculate an immediate payroll tax increase from 12.4 percent to 16.05 percent, while indefinite solvency would require a hike to 17.6 percent.
  • Cato Institute researchers estimate a 22-year-old entering the workforce today would incur an additional $110,000 in payroll taxes under the 16.05 percent rate and $157,000 under the 17.6 percent scenario.
  • Public confidence in Social Security’s future has fallen to 36 percent overall and just 25 percent among adults aged 18 to 49, according to AARP surveys.
  • Policymakers and analysts are weighing reforms such as adjusting benefits, expanding the tax base, or creating new revenue streams to address the program’s $25 trillion shortfall.