Retirement, survivor and disability programs projected to exhaust reserves by 2034
Social Security is on the path to insolvency, prompting lawmakers and experts to hunt for ways to address its long-term finances. The Wall Street Journal’s Oct. 22 analysis sets out five of those options, each drawn from estimates produced by the Social Security Administration’s Office of the Chief Actuary, showing how far each would narrow the program’s 75-year shortfall and how long each would postpone the insolvency date, if at all.
The program already spends more on benefits than it receives in tax revenue. Within a few years, reserves built up in flush years will be exhausted, raising the prospect of benefit cuts that exceed 20%. No one in Congress expects that to happen. But Congress hasn’t figured out what to do instead.
Because the U.S. population is aging, costs for Social Security are projected to grow faster than revenue. In 2033, Social Security is projected to spend $2.4 trillion and collect $2 trillion, equal to 16% and 13% of U.S. taxable payroll, the journal reported. The program has been running annual deficits, and by 2034 the combined retirement, survivor and disability programs are projected to have exhausted the reserves Social Security built up in surplus years. Over 75 years, those annual deficits add up to an estimated $29.3 trillion in present-value dollars, what the journal described as the program’s long-range gap. The challenge for policy makers, the journal said, is to shrink or eliminate the gap between cost and revenue.
Lawmakers have a range of approaches in front of them. Beyond borrowing more or considering outside-the-box ideas such as an investment fund offered by Sen. Bill Cassidy (R., La.) to bolster long-run solvency, they have options within the current confines of the program: lower benefit levels, raise retirement ages and expand payroll taxes. The options the journal identified change benefit levels, retirement timing, payroll taxes, or the formulas and indexes used to calculate benefits.
Payroll-tax financing changes
Payroll taxes that go to Social Security stop once earnings reach an annual cap, currently $184,500. One proposal, popular among Democrats according to the journal, would eliminate that cap. Taxes on higher-income workers would jump, and they would not qualify for more retirement benefits. If implemented soon, the journal reported, the change would stave off insolvency and close most but not all of the long-term gap, though Social Security would still run annual deficits. The actuary’s estimates list the effect as delaying insolvency by two years.
A more modest version of the same idea would ensure that 90% of wages are subject to the tax without removing the cap for top earners, and would provide incremental benefits to people who pay those additional taxes. That combination, the journal reported, slightly delays insolvency and narrows the long-run gap.
Retirement timing and benefit indexing
One proposal would gradually bump the normal retirement age — now approaching 67 — to 69, with the first incremental effects on those age 62 in 2027. It would also raise the age for delayed retirement and higher monthly benefits to 72 from 70. Increasing the retirement age reduces the number of years people get benefits, and over time the change reduces Social Security’s costs.
Social Security benefits rise each year along with a measure of inflation. Changing in December 2027 to a different — and typically smaller — inflation metric known as the “chained” consumer-price index would mean smaller increases each year. The journal reported that the change yields minimal short-run savings but closes some of the gap over time.
Initial Social Security benefits for retirees are based on a calculation tied to growth in average wages. Changing that for retirees in 2033 to tie the initial calculation to inflation instead would make a big dent in the program’s cost — and in expected benefits. By the 2080s, Social Security would be running annual surpluses under the approach.
Implementation constraints
Because Congress is often reluctant to reduce benefits for retirees or people approaching retirement, many politically plausible changes to Social Security’s costs don’t delay the insolvency date; they are phased in gradually. Acting sooner, the journal said, would give more time for changes to take effect.
Congressional uncertainty
The ultimate answer on Social Security will probably include many proposals stapled together — and perhaps additional borrowing. But lawmakers, the journal reported, are a long way from making decisions.
Estimation methodology
Social Security’s actuaries provide annual estimates of the effects of dozens of different ideas, and the estimates behind these five options come from the Social Security Administration’s Office of the Chief Actuary. The projections include Social Security’s combined retirement, survivor and disability programs. Readers can look at the actuary’s estimates themselves, and other groups, including the Committee for a Responsible Federal Budget, maintain their own do-it-yourself tools for evaluating proposals.
Richard Rubin, The Wall Street Journal’s U.S. tax policy reporter, and graphics reporter Kara Dapena wrote the analysis. Rubin was the lead author on the Journal’s coverage of major tax law changes in 2017 and 2025; before joining the Journal in 2015, Rubin covered tax policy for Bloomberg News and Congressional Quarterly. Dapena joined the Journal in 2017 and was part of the team that won the 2025 Pulitzer Prize in National Reporting for coverage of Elon Musk. Earlier, as data visualization editor at the Miami Herald, Dapena was part of the team that won the 2017 Pulitzer Prize in Explanatory Reporting for the Panama Papers series.