A recent analysis by the Committee for a Responsible Federal Budget (CRFB) warns that Social Security’s main trust fund will be insolvent by the end of 2032, triggering automatic benefit cuts for millions of American retirees. Unless Congress acts, these cuts could result in a $18,000 reduction per year for those relying on the program. The situation is dire, with projections suggesting that by the end of the century, Social Security could face required benefit cuts of over 30% unless lawmakers shore up the program’s finances.
The ticking clock is already drawing closer to insolvency than many realize. By late 2032, Social Security’s retirement program will no longer be able to pay out promised benefits in full, resulting in an immediate, across-the-board benefit reduction. The impact would vary by income and household type, with low-income couples facing a $11,000 shortfall and high-income couples losing up to $24,000 per year.
Social Security is funded by a dedicated payroll tax, but the gap between what goes out in benefits and what comes in through taxes is growing. Recent policy changes have accelerated this trend, increasing the necessary benefit reduction by about one percentage point. The CRFB report urges policymakers to work toward bipartisan solutions that secure Social Security’s future.
Warren Buffett, a vocal critic of Social Security insolvency, has warned that reducing payments below their current guaranteed levels would be a grave mistake. He argues that higher earners, including himself, should contribute more and suggests raising the retirement age as a potential solution.
The CRFB is widely respected in policy circles for its data-driven analysis and advocacy for sustainable fiscal policy. Its proposed reforms, such as increasing the amount of wages subject to payroll tax or progressive indexing, aim to make Social Security fiscally sustainable. However, these ideas have drawn criticism from some quarters.
As lawmakers approach 2032, Americans approaching retirement will want to pay close attention to congressional action on the looming cliff. The situation demands urgent attention and bipartisan solutions to secure Social Security’s future.
Source: https://fortune.com/2025/07/28/when-will-social-security-run-out-insolvent-warren-buffett-crfb