Social Security's trustees report said the program is on track to become insolvent by the end of 2032, when beneficiaries would see their monthly checks cut by 22%.

Social Security guarantees income to over 70 million Americans. Across-the-board benefit cuts would significantly impact retirees, disabled workers and survivors, especially amid rising living costs.

Social Security keeps more Americans out of poverty than any other program in the U.S., according to the Center on Budget and Policy Priorities, a left-leaning think tank.

In last year's report, the program's trustees projected that the Old-Age and Survivors Insurance fund, which pays benefits to retirees and survivors of deceased workers, would be depleted in 2033. In August, the agency moved the insolvency date to the end of 2032, citing the One Big Beautiful Bill Act's effect on taxation of benefits. 

Other issues are also weighing on Social Security's finances, including demographic factors. The report lowered the country's projected fertility rate to 1.75 births per woman, down from 1.9 in last year's forecast, which signals there may be fewer workers in the coming decades to support the program. 

Declining immigration is also expected to weaken Social Security's finances because fewer workers will be paying into the program, the report said.

On Tuesday, the Social Security Administration said the agency would pay 78% of benefits upon insolvency.

Social Security has long faced funding pressures, though the projected trust fund depletion date shifts from year to year as economic and demographic factors change. The core challenge is an aging U.S. population: More Americans are collecting benefits, while fewer workers support the program through payroll taxes, forcing Social Security to draw down its trust funds.

Retirement experts said the new report underscores the urgency of shoring up the program.

"If we cut Social Security, nobody will be able to retire," Nancy Altman, president of Social Security Works, an advocacy group for the program, told CBS News. "It'll go back to the years before Social Security, when people moved in with their adult children."

Congressional action

Altman also expressed optimism that Congress will take steps to shore up the program before that occurs because of the widespread financial distress that would befall millions of seniors and disabled Americans if their monthly checks were cut. 

At the same time, time is running out to make changes that could strengthen the program, experts said.

"This should be a wake-up call: Congress needs to act. Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire," AARP CEO Dr. Myechia Minter-Jordan said in a statement. "No family should see any cuts to what they've earned in Social Security."

A common misconception is that insolvency would mean Social Security could no longer pay benefits. Instead, beneficiaries would continue receiving monthly checks, though reduced — an outcome advocates for older Americans warn could create financial hardship for millions of the program's beneficiaries.

Asked during a Wednesday House subcommittee hearing about possible benefit cuts in 2032, Social Security Commissioner Frank Bisignano said that it's up to Congress to solve the issue. 

"My job was to make it perform as well as possible so you all have a set of options" to fix the program, he said.

Projected cuts

Social Security's beneficiaries could see their monthly benefit checks slashed by an average of about $500 if the program's retirement trust fund becomes insolvent, according to a report published earlier this month by the Committee for a Responsible Federal Budget, a fiscal policy think tank.

The reduction would amount to a 24% cut in the typical benefit payment, the analysis found.

Advocacy groups, including AARP, have long urged Congress to strengthen Social Security's finances. Proposals generally involve either raising additional revenue, reducing future benefits or some combination of the two. Some Republicans have proposed raising the full retirement age above 67, while many Democrats favor increasing payroll tax revenue.

For instance, some advocates have pushed to eliminate the income cap on the payroll tax. Currently, workers who earn over $184,500 don't pay Social Security taxes on any amount above that. 

"The Social Security trust fund is under strain because Congress has failed to update the program for the economy we actually have," Elizabeth Wilkins, CEO of the Roosevelt Institute, a progressive think tank. "Too much income now flows to the top, where it escapes Social Security taxation."

Republican lawmakers favor cuts to shore up the program, such as raising the retirement age or introducing means testing, or eliminating Social Security benefits for people who earn above a certain amount, according to Max Richtman, the CEO of the National Committee to Preserve Social Security and Medicare. 

For instance, eliminating Social Security benefits for the top 40% of U.S. households, which includes many middle-class families, would solve the program's financing issues, according to the Concord Coalition, a nonpartisan think tank. That threshold would begin with families in $59,200 in household income, the group said.

"It would be grossly unfair to ask beneficiaries on fixed incomes to bear the cost of strengthening Social Security," Richtman said, adding that his group prefers raising taxes on high-income earners to strengthen the program's finances.

Medicare insolvency date

Medicare's hospital insurance trust fund will be unable to pay full benefits in the second quarter of 2033, or a quarter earlier than the agency had projected last year, according to a statement from the trustees. The trust fund helps fund Medicare Part A, which covers costs such as inpatient hospital stays and skilled nursing facility care.

If the Medicare fund becomes insolvent, it would be able to pay only 89% of the program's benefits, the trustees said.

About 70.1 million people are enrolled in Medicare, the federal health insurance program that covers people 65 and older, as well as those with severe disabilities or illnesses.

Last year, the "go broke" date for Medicare's hospital insurance trust fund was pushed up to 2033 from 2036, according to the trustees' report.

"In seven years, Medicare faces an automatic cut to providers that could lead to disruptions in care or higher costs for patients," Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a fiscal think tank, said in a statement.