New report: Without reform, social security benefits threaten to fall drastically

How would you feel if you and your spouse lost $16,500 in income each year?

That's how much a typical dual-income couple is estimated to lose in Social Security benefits when they retire, once the Old Age and Survivors Insurance (OASI) trust fund is exhausted in 2033, the nonprofit, nonpartisan Committee for a Responsible Federal Budget (CRFB) said in a new report Thursday. A typical single-income couple would lose $12,400, it said.

Because Social Security currently pays out more benefits than it collects in payroll taxes and other revenue, the program is drawing on its reserves in the OASI trust fund to cover the remaining cost of benefits. The fund only has enough reserves to cover 100% of benefits until the fund's reserves run out in 2033. When that happens, the law caps benefits at the revenue coming in, essentially mandating a 21% across-the-board benefit cut for the program's 70 million beneficiaries, CRFB said.

“Former President Donald Trump and Vice President Kamala Harris have both said they would 'protect' the Social Security program,” CRFB said. “However, neither has presented a plan to actually do so.”

Who will be the biggest loser?

According to the CRFB, low- and dual-income couples retiring in 2033 would lose $10,000 in benefits, compared to $21,800 for high-income couples.

“Although the cut for a low-income couple would be smaller, corresponding to a 21% reduction in their benefits, the cut would represent a larger proportion of their income,” it said.

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It gets worse over time

If the government does not reform the program, the gap between revenue and benefits paid out will continue to grow, CRFB said. The 21 percent cut in 2033 will worsen to 31 percent by 2098, it said.

In addition, if Trump implements his plan to stop taxing Social Security without a plan to fully replace that revenue, the program would be further hampered, CRFB said.