Will Social Security Run Out?

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One of the most anxiety-causing subjects for many people who have retired or are nearing retirement age is whether Social Security will run out.

The latest annual Social Security and Medicare Trustees Reports headed by the U.S. Department of the Treasury states that the Old-Age and Survivors Insurance Trust Fund (OASI), which pays out retirement and survivor benefits, will be able to pay 100% of people’s benefits until 2033, unchanged since last year.

In this article, we’ll explore the projections for the future of Social Security as well as Medicare and get some actionable advice from money expert Clark Howard.

Social Security Shortfall Projections: What To Know

When Will Social Security Run Out?

What we’ve commonly known as Social Security is a combination of two trust funds with two different projected depletion dates:

  • The Old-Age and Survivors Insurance (OASI) Trust Fund, is projected to be able to pay 100% of total scheduled benefits until 2033 — and then reduced to 79% of scheduled benefits.
  • The Disability Insurance (DI) Trust Fund, is forecast to be 100% payable through at least 2098.

These can’t be combined under current federal law. However, the report likes to look at them in tandem to evaluate the overall health of the Social Security program.

The report explains that “If the OASI Trust Fund and the DI Trust Fund projections are combined, the resulting projected fund (designated OASDI) would be able to pay 100 percent of total scheduled benefits until 2035, one year later than reported last year. At that time, the projected fund’s reserves will become depleted and continuing total fund income will be sufficient to pay 83 percent of scheduled benefits.”

Another trust, the Hospital Insurance (HI) Trust Fund, which primarily funds Medicare, is forecast to be 100% payable until 2036, according to the report. After that, the fund’s reserves will become depleted and it will pay 89% of total scheduled benefits.

A graphic (below) from the Social Security Administration shows which programs are projected to run out and when.

When will Social Security run out?

Screenshot via ssa.gov

Why Are Social Security and Medicare in Trouble?

One of the predicted challenges is that the combined cost of Social Security and Medicare is expected to grow from 9% of the gross domestic product in 2024 to 11.1% by 2035 and to 12.3% by 2098, “with most of the increase attributable to Medicare,” the report says.

Clark says that despite the news of the impending shortfall of funds to fully pay for Social Security and Medicare, the sky is not falling for the U.S. economy. That being said, here are a couple of things he says that continue to soften the U.S. economy, endangering Social Security and Medicare.


The Budget Deficit

Clark mentions that the U.S. budget deficit continues to climb, which is dragging down America’s spending power,

According to the latest figures from the U.S. Treasury,  the federal government has spent $855 billion more than it has collected in fiscal year 2024. Ouch!

“If we can’t get that together, what happens when economic times get really bad? When they’re bad, tax collections go down and spending goes up, the deficit gets even wider,” Clark says. “How are we going to fund that? How are we going to deal with this gap in Social Security and Medicare?”


“Our economy is fantastic,” he says, “but people don’t feel it because of the brutal impact of inflation we’ve had since 2019 until now. And that inflationary cycle has been bad-ugly.”

“The Federal Reserve has still not been able to get inflation down to its target of 2%. Recently it’s been running over 3%,” Clark says. “This is not OK. And the reality is if we were to get our act together on what we spend vs. what we bring in, that will also bring down inflation. That is just a fact. We have too much money circulating.”

Clark’s View: How To Solve Social Security

“How are we going to deal with this gap in Social Security and Medicare? It’s going to require discipline on our part as a country,” Clark says.

“In the case of Social Security and Medicare, we’re going to have to have more dollars coming in i.e. that word that nobody wants to hear: tax. We’re going to have to have more in order to fund the raw numbers of people receiving Medicare and Social Security,” Clark says.

Of course, paying more taxes doesn’t mean you can’t take advantage of tax-saving strategies to help your wallet.

What Will Happen To Social Security in 2033?

While the U.S. Treasury’s report doesn’t go on to project how long the Social Security program can last with a 79% payout schedule (or 83% if the funds were combined), Clark is confident the system can last for many years if responsive leadership takes the issue seriously and acts.

“I believe that it will be dealt with by a future Congress. The later we wait, the more difficult it will be to fix, but it will be fixed,” he says.

The important thing that Clark wants consumers to note is that there’s a huge difference between no Social Security and a reduced Social Security, which is what the report has forecast.


“Even if the dire predictions come true — and Congress does nothing about it — in 2033, what happens is Social Security checks don’t stop,” he says. “The amount of money you receive will be based on pay as you go, at that point.”

Should You Still Wait Until Age 70 Before Taking Social Security?

So the problem’s there, but does it in any way change Clark’s answer about waiting to retire at age 70? “It does not,” he says. “Because again, Social Security is not going to stop paying even if Congress does the irresponsible thing — buries its head in the sand — and does nothing.”

And What Happens if Congress Doesn’t Enact Some Social Security Reform?

“It’s not a hard one to fix,” Clark says of Social Security’s issue, “but even if it’s not fixed, I’m telling you still, I would wait.”

One reason why Clark would still wait until age 70 to take Social Security is how much money he’d be leaving on the table if he lives another 20 to 30 years.

“The greatest risk for all of us is something that’s actually good: longevity,” he adds. “And the check you get from the base [of Social Security] and then … the cost of living adjustments over the years are so much higher if you wait. And if you’re married, it may also heavily affect your spouse and the benefits they would receive after you pass away.”

Final Thoughts

Yes, Social Security needs some fixing, but it will still be around when you retire, so there’s no need to panic. Clark says the system will survive as long as responsible lawmakers continue to make substantive changes to the program as needed.

“The problems with Social Security are not major problems to fix, particularly if we fix them now or in the next year or two,” he says.

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