Updated

Updated · CNBC · Jun 16

Penn Wharton Sees Social Security OASI Fund Depleted in February 2033, Combined Funds in 2035

Updated

Updated · CNBC · Jun 16

Penn Wharton Sees Social Security OASI Fund Depleted in February 2033, Combined Funds in 2035

Q: As Social Security faces a $25 trillion deficit, are benefit cuts for millions of retirees now simply unavoidable?

No. Broad benefit cuts are automatic only if Congress does nothing. The new Penn Wharton Budget Model says Social Security’s retirement trust fund could be depleted in February 2033, while the trustees project late 2032. For the combined retirement and disability funds, the dates are February 2035 and late 2034. Depletion would not mean Social Security stops paying benefits, but it would mean incoming payroll taxes could cover only about 83% to 86% of scheduled benefits at first, implying an immediate cut of roughly 14% to 17%, with larger gaps later. That risk is serious because the long-term shortfall is large: about $25 trillion through 2100, with an actuarial deficit of roughly 4.4% to 4.7% of taxable payroll. Penn Wharton estimates closing it entirely would require raising the payroll tax from 12.4% to 17.1%, or an equivalent benefit reduction, or a mix of both. Experts warn delay makes any eventual fix more painful. But that does not make across-the-board cuts unavoidable. Lawmakers still have multiple options: raise payroll taxes, lift or expand the taxable wage cap, slow benefit growth for higher earners, raise the retirement age gradually, or combine targeted benefit changes with new revenue. Some proposals would concentrate reductions on wealthier retirees rather than all beneficiaries. The key fact is that automatic cuts are the default under current law, not the only possible outcome. The nearer the deadline gets, the harder it becomes to avoid sharper changes.

3 articles · Updated · CNBC · Jun 16

February 2033 is Penn Wharton Budget Model’s new depletion date for Social Security’s retirement trust fund, with the combined retirement and disability funds lasting until February 2035 if lawmakers make no changes.
Those dates are slightly later than the Social Security trustees’ June 9 report, which projected depletion in late 2032 for OASI and the third quarter of 2034 for the combined funds.
86% of scheduled benefits would still be payable when the combined funds run out, PWBM said, with that share falling to 60% by 2100 because payroll-tax revenue would continue even after reserves are exhausted.
4.65% of taxable payroll is PWBM’s projected actuarial deficit; closing it would require lifting the current 12.4% payroll tax to 17.1%, cutting benefits by an equivalent amount, or combining both.
PWBM said its microsimulation model differs from the trustees’ aggregate-assumption approach, while warning that lower fertility, longer life spans and AI-driven economic swings could still reshape the outlook.

Sources

Left100%

CNBC1d ago

Penn Wharton Budget Model Forecasts Social Security Trust Fund Depletion by February 2033 (OASI) or 2035 (Combined)

Penn Wharton Budget Model1d ago

Social Security Outlook, June 2026 | Penn Wharton Budget Model

revistaneo.com9h ago

New Wharton forecast puts Social Security trust fund depletion later than official projections — NEO

5 Sources

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Countdown to 2033: Social Security and Medicare Trust Funds Near Depletion, Forcing 21% Benefit Cuts Without Reform

Overview

Social Security and Medicare face an urgent financial threat, with both the combined Social Security trust funds and the Medicare Part A trust fund projected to be depleted by 2033. The Old-Age and Survivors Insurance (OASI) Trust Fund is expected to run out even sooner, by late 2032, which is earlier than previously reported. While the Disability Insurance (DI) Trust Fund remains stable on its own, combining it with OASI would only slightly delay depletion. These worsening projections highlight the immediate need for action, as millions could face significant benefit cuts if Congress does not intervene soon.

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