Social Security Trust Fund Projected to Run Out by 2032, CBO Says

'The fiscal trajectory is not sustainable,' CBO Director Phillip Swagel wrote, noting that rising debt and interest costs add to long-term financial pressures.

Kelly McBride Ni

Published: 2/12/2026, 4:24:02 AM EST

Social Security Trust Fund Projected to Run Out by 2032, CBO Says — The Congressional Budget Office projects the Social Security trust fund for retirement and survivor benefits will be depleted by 2032. (J.J. Gouin/Shutterstock)

The Social Security trust fund that pays retirement and survivor benefits is projected to be depleted by 2032, one year earlier than last year's projection, according to the Congressional Budget Office's (CBO) new report, The Budget and Economic Outlook: 2026 to 2036.

The report says the Old-Age and Survivors Insurance (OASI) Trust Fund will exhaust its reserves by that year. After the reserves run out, Social Security can still pay benefits, but only from incoming payroll taxes, which would not be enough to cover the full amount currently scheduled under law.

“The fiscal trajectory is not sustainable,” CBO Director Phillip Swagel wrote, noting that rising debt and interest costs add to long-term financial pressures.

The report projects federal debt held by the public will grow from 99 percent of GDP in 2025 to 120 percent by 2036. Interest costs are also expected to rise from $1 trillion in 2026 to $2.1 trillion in 2036.

Federal deficits are also projected to remain high. The 2026 deficit is estimated at $1.9 trillion, or 5.8 percent of GDP, and deficits over the next decade are expected to exceed $23 trillion. The report identifies Social Security, Medicare, and rising interest costs as the major drivers of these trends.

For retirees, the 2032 exhaustion date marks a critical point in Social Security’s financing. While the trust fund currently allows the program to pay full benefits, once reserves are exhausted, payments will be limited to payroll tax revenue.

According to the Bipartisan Policy Center, payroll tax revenue in 2025 was expected to cover about 77 percent of scheduled Social Security benefits.

Budget Outlook Beyond Social Security

The report also notes that recent policy and economic changes have had a smaller effect on the federal budget.

Higher tariffs are projected to reduce deficits by about $3 trillion from 2026 to 2035, largely by increasing government revenue. Meanwhile, lower immigration is estimated to increase deficits by roughly $0.5 trillion.

The CBO also projects “stronger real GDP growth in 2026 as the positive effects of the 2025 reconciliation act on growth outweigh the drag from higher tariffs and lower immigration.”

The 2025 Budget Reconciliation Act, or One Big Beautiful Bill Act (OBBBA), was enacted in July 2025. This sweeping legislation advances core priorities of the Trump administration’s second term, particularly in taxes, federal spending, and policy reform.

Among its major provisions are reductions and new eligibility requirements for social services and benefit programs.

For example, the act introduced Medicaid reforms, including work requirements for individuals and reducing federal spending on the program by about 12 percent. For SNAP (food stamps), it expands work requirements for recipients, requires states to provide matching funds, and restricts eligibility for non-U.S. citizens.

According to the CBO, after a strong 2026, growth is estimated to slow to about 1.8 from 2027 onward, as slower labor force growth and larger deficits offset some of the gains.

The report also factors in productivity increases from artificial intelligence (AI), which are expected to raise output in the business sector by only 1 percent by 2036.

CBO also forecasts that the Federal Reserve will lower the federal funds rate by 25 basis points in 2026, while the 10-year Treasury yield rises gradually from 4.1 percent in late 2025 to 4.3 percent by late 2027.