Social Security’s retirement trust fund may run out in nine years. Here’s how the next U.S. president may address that

With the Social Security Administration facing a looming funding crisis over the next decade, it’s clear that the next U.S. president — either Democratic candidate Kamala Harris or Republican candidate Donald Trump — is poised to inherit a Social Security dilemma.

Almost 68 million Americans receive Social Security payments every month. The benefits support seniors in their retirement, disabled Americans and survivors of beneficiaries, but the future of the Social Security Administration has been in jeopardy for years.

More than 11,200 Americans are now turning 65 every day. As more retirees start to claim Social Security, there are not enough workers contributing to the program to make up for that increase in benefit payments.

When such a shortfall happens, Social Security turns to its trust funds — money that is set aside to help pay for benefits and other administrative costs.

But the trust fund Social Security relies on to pay retirement benefits is projected to be depleted in 2033. At that time, just 79% of benefits may be payable, according to the program’s trustees.

The average retired worker would see about a $403 cut to their current average monthly benefit of $1,920.

Most Americans rank Social Security as “one of the top” or a “very important” issue that will help determine how they vote in November, a recent CNBC poll found.

Both presidential candidates — former president Trump and Vice President Harris — have vowed to protect Social Security benefits.

But restoring the program’s solvency will require changes — benefit cuts, tax increases or a combination of both. Yet some experts say the candidates’ discussions have thus far avoided specific details on how to address that shortfall.

“We’re not seeing anyone step up and say, ‘In nine years, our main retirement program is looking at the trust of being insolvent, and that could lead to roughly a 20% benefit cut across the board of everybody,” said Jason Fichtner, chief economist at the Bipartisan Policy Center and executive director of the Alliance for Lifetime Income’s Retirement Income Institute.

On the campaign trail, Trump has touted an idea aimed at letting retirees keep more of their Social Security checks — ending taxes on benefits.

“Seniors should not pay tax on Social Security,” Trump wrote on July 31 in all capital letters on social media platform Truth Social.

A recent ABC News/Ipsos poll found 85% of voters support the idea.

Currently, retirees pay federal income taxes on up to 85% of their benefits, depending on their incomes.

Just how much taxes retirees pay on benefits is based on a formula called combined income, the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.

Married couples may pay taxes on up to 50% of their benefits if their combined incomes are between $32,000 and $44,000. If their incomes are over $44,000, up to 85% of their benefits may be taxable.

Individuals may be liable for taxes on up to 50% of their benefits if their incomes are between $25,000 and $34,000. If they have more than $34,000 in income, up to 85% of their benefits are taxable.

Because those thresholds do not change from year to year, more beneficiaries are paying taxes on their benefit income over time.

Ending taxes on Social Security benefits would move the insolvency date of Social Security’s trust fund closer by over one year, according to the Committee for a Responsible Federal Budget.

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And it may not make a big difference in retirees’ budgets, according to Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

The median household income for retirees is about $50,000, so the “vast majority” pay very little or nothing in taxes on their Social Security benefits, Gleckman said.

Exempting taxes on benefits would mostly help those with incomes between $63,000 and $200,000, the Urban-Brookings Tax Policy Center’s research found.

But while the top 20% of households would see an average tax cut of about $1,400 after the elimination of the taxes on Social Security benefits, Gleckman explained, they would see an average tax increase of $6,500 with Trump’s plans to impose tariffs on imports.

“The net effect of what Trump is trying to do, if you look at everything including the tariffs, is probably increased taxes on retirees, even if they do get some benefit from repealing the tax on Social Security benefits,” Gleckman said.

The Trump campaign did not respond to a request for comment by press time.

The Harris campaign’s economic plan promises to “shore up Social Security and Medicare so that these essential programs will stay solvent in the long run by making corporations and the wealthiest Americans pay their fair share in taxes.”

In budget proposals and during the State of the Union, President Joe Biden has likewise called for having high earners pay more into the program.

More specific details on how Democratic candidate Harris would restore solvency to the program as president were not available by press time.

Employers and employees each pay 6.2% of wages to Social Security up to a taxable maximum (self-employed individuals pay 12.4%). In 2024, the limit on earnings that are subject to the Social Security payroll tax is $168,600. Top earners with $1 million in gross annual wage income stopped paying into the program as of March 2, according to the Center for Economic and Policy Research.

Washington Democrats have proposed reapplying those taxes for earnings over $400,000 or $250,000 in separate proposals, while also potentially raising taxes on investment income. Those tax increases would improve the program’s solvency, while also making certain benefit increases possible, per the proposals.

If Harris holds to the $400,000 threshold set by the Biden administration, her Social Security proposal would have “no impact on the vast majority of households,” according to Gleckman, since around 95% to 98% of households make that amount or less.  

“Vice President Harris and Governor Walz are fighting to lower costs and will always protect and strengthen Social Security and Medicare,” campaign spokeswoman Mia Ehrenberg said in a statement.

As Social Security’s depletion dates get closer, any reform changes would need to phase in more quickly.

And people ages 55 and over — who are typically left out of Social Security reform proposals such as raising the retirement age — may also feel the effects of any changes, according to Fichtner.

“You don’t have a lot of time to change your retirement trajectory once you hit 55,” Fichtner said. “But now that we’re getting so close to trust fund depletion … and the magnitude is so large, I’m not sure we can actually afford from a financial standpoint to hold them harmless.”

Regardless of who is elected, it remains to be seen how much a new president can accomplish on Social Security.

With 60 votes required in the Senate to pass Social Security reform, both parties would have to agree.

Experts say it is possible lawmakers may wait until the last minute to address the issue.

“As you get closer and closer to the insolvency date, it means the benefit reductions have to be steeper and quicker, and it means the tax increases have to be more significant and faster,” Gleckman said. “So it makes it even harder.”