When social security funds get depleted, beneficiaries stand to lose around 20 percent of their scheduled benefits.
Medicare and Social Security funds are now expected to drain out earlier than previous estimates, according to two new reports released on Wednesday.
Social security is made up of two trust funds—old-age and survivors insurance (OASI) and disability insurance (DI). The two are combined for analyzing the overall status of social security funds, referred to as the Old-Age, Survivors, and Disability Insurance (OASDI) program.
The 2025 OASDI trustees report, published on June 18, said the total cost of the social security program started exceeding its total income in 2021. Currently, the fund is projected to be depleted by 2034, a year earlier than last year’s expected date of 2035.
Following depletion, OASDI will only be able to pay 81 percent of scheduled benefits to its recipients.
“The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust,” the report said. “Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits.”
At present, there are around 70 million social security beneficiaries in the United States. The program covers 185 million workers and their families.
The June 18 Medicare trustees report said the program’s Hospital Insurance (HI) trust fund is expected to be depleted by 2033, three years earlier than the previous projection.
Hospital Insurance, also known as Medicare Part A, helps pay for inpatient hospital services, hospice care, skilled nursing facilities, and home health services after hospital stays.
Hospital Insurance’s income is projected to exceed expenses through 2027, following which it is expected to suffer deficits until the fund depletes in 2033.
The estimated depletion date was moved up “primarily due to the change in projected expenditures,” the report stated, adding that costs over the short term are “projected to be higher than last year’s estimates.”
Hospital Insurance is one of the two trust funds powering Medicare, the other being the Supplementary Medical Insurance (SMI) trust fund. According to current estimates, the SMI trust fund is expected to be “adequately financed over the next 10 years and beyond.”
Medicare covered 67.6 million Americans last year, of which 60.3 million were aged 65 and older, while 7.3 million were disabled.
