A recent report from the Committee for a Responsible Federal Budget (CRFB) paints a concerning picture for newly retired, dual-income couples. These couples could lose nearly $17,000 in annual Social Security benefits starting in 2033 if Congress fails to address the program’s funding crisis.

Lawmakers are under increasing pressure to ensure Social Security’s long-term sustainability. The program’s trustees project that the retirement trust fund will be insolvent by 2032. Without congressional action, benefits will need to be cut by an estimated 22% to keep costs aligned with revenues.

Impact on Retirees

The CRFB’s analysis focuses on how benefit cuts would affect newly retiring couples if the fund is exhausted in late 2032. Today’s 61-year-olds would reach normal retirement age then.

The cuts’ size will depend on a couple’s age, marital status, and work history. A dual-earning, low-income couple faces a yearly reduction of about $10,200. A medium-income couple could lose $16,900 annually, while high-income couples might see cuts as large as $22,300 a year.

“While the absolute size of these cuts would be smaller for low-income couples than high-income couples, they would also be a larger share of total incomes for low-income retirees and hence more financially disruptive,” the CRFB report notes.

If Congress doesn’t act soon, benefit cuts will worsen over time. The gap between Social Security’s costs and revenues grows wider. By the century’s end, annual cuts may reach 35%, according to the report.

Senators currently in office will need to deal with Social Security’s depletion. Inaction will impact retirees nationwide.

Trust Fund Projections

The June report from the Social Security Board of Trustees indicates that Social Security’s combined trust funds—covering old age and disability—won’t provide full benefits by 2034. Post-2034, revenue would cover about 83% of planned benefits.

The Old-Age and Survivors Insurance (OASI) trust fund is crucial for Social Security retirement and survivor benefits. Projections show it may run out in the fourth quarter of 2032, with 78% of benefits payable at that time.

The fund relies mainly on payroll taxes paid by today’s workforce. Surpluses are invested in U.S. Treasury securities. These reserves have historically covered shortfalls when payouts exceed revenue. But Social Security has been disbursing more than it collects for years, draining reserves—a major long-term concern.

Pressure on lawmakers grows, with over 70 million Americans reliant on Social Security for primary retirement income.

Legislative Efforts

This week, a bipartisan group of senators introduced the Protecting Retirement Opportunities and Maintaining Income Security for Everyone (PROMISE) Act. This legislation demands a congressional vote on a plan to resolve Social Security’s financial challenges, breaking years of political stalemate.

“Congress has known about this challenge for more than a decade, but it has not taken up these politically challenging issues. And the longer Congress waits, the more difficult it will be to address this issue in the future,” stated Senator Dick Durbin, a Democrat and one of the bill’s proponents.

Another bill being considered is the reintroduced Social Security 2100 Act. This legislation proposes using the Consumer Price Index for the Elderly (CPI-E) to calculate Cost of Living Adjustments. It aims to increase benefits by 2% and set a new minimum benefit at 125% of the federal poverty rate.

The Senior Citizens League (TSCL) supports this bill, calling it the “gold standard” for Social Security reform. They argue it would extend the program’s viability by 32 years, although TSCL acknowledges its slim chance of passing.

“The bill is the gold standard for Social Security reform and accomplishes the majority of changes older Americans want to see for the program,” stated TSCL executive director Shannon Benton.