Social Security’s retirement trust fund faces funding shortfall one year earlier than expected

WASHINGTON (AP) — Social Security’s retirement trust fund is projected to face a funding shortfall in 2032, a year earlier than last year’s projections, according to an annual report released Tuesday, while Medicare’s hospital insurance trust fund will be unable to pay full benefits in 2033, which is unchanged from last year’s estimate.

Rising healthcare costs and government spending have contributed to a projected depletion date that is less than 10 years from now.

The looming challenge for the programs is a partial funding gap, not a collapse. Even after trust fund depletion, the system will continue issuing benefits, albeit at reduced amounts.

Last year, Medicare’s hospital insurance trust fund go-broke date was pushed to 2033 from 2036 the year before that, according to the report from the programs’ trustees.

Meanwhile, Social Security’s combined trust funds — which cover old age and disability recipients — will be unable to pay full benefits beginning in 2034, unchanged from the 2025 report. After that, incoming revenue would cover about 83% of scheduled benefits.

Social Security Commissioner Frank Bisignano said the Trump administration is “committed to protecting and strengthening Social Security” and “eliminating waste, fraud, abuse and ensuring program integrity.”

The trustees, who include the treasury secretary, labor secretary, health and human services secretary and the Social Security commissioner, say the latest findings show the urgency of needed changes to the programs, which have faced dire financial projections for decades. But making changes to the programs has long been politically unpopular, and lawmakers have repeatedly kicked Social Security and Medicare’s troubling math to the next generation.

AARP’s CEO Myechia Minter-Jordan said in a statement that the latest numbers “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,” she said. “No family should see any cuts to what they’ve earned in Social Security. ”

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

Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67. The eligibility age of 65 has never changed for Medicare.