A typical retired couple could face a loss of $17,400 in their annual Social Security benefits in 2033, when the retirement program’s main trust fund is projected to run dry. That estimate comes from the fiscal hawks at the Committee for a Responsible Federal Budget. The projected cut in benefits in 10 years would apply to a newly retired dual-income couple, while a typical, newly retired single-earner couple could see a cut of $13,100 per year.
The 23% across-the-board reduction in benefits will occur if lawmakers fail to act to prop up the finances of the Social Security system before 2023. Under current law, once the Social Security trust fund is exhausted, benefit payouts would be limited to the amount of money flowing in from payroll taxes at the time — which would cover just an estimated 77% of total obligations.
The dollar figure will vary for different types of households and different lifetime income levels. A high-income couple could see a cut of $23,000 per year, while a low-income couple could lose $10,600.
While the numbers are an estimate, CRFB says they point to the pressing need to fix the funding problem before benefit cuts become necessary and unavoidable. “Any 2024 presidential candidate who pledges not to touch Social Security is implicitly endorsing a 23 percent across-the-board benefit cut for the 70 million retirees when the Social Security retirement trust fund reaches insolvency in just a decade,” the group said.
