The trust fund that pays Social Security retirement and survivor benefits will run out of money in fiscal year 2032. Unless Congress acts, benefits would be cut by 26 percent the next year, according to new projections from the Congressional Budget Office.
The nonpartisan agency released its 2026 long range Social Security projections Sept. 17. They show the retirement and survivors trust fund running out during fiscal 2032, which ends Sept. 30, 2032. Federal law does not allow the fund to go negative. Once its reserves are gone, Social Security can pay only what incoming payroll taxes cover.
That affects a lot of people locally. As of December 2025, 59,420 York County residents and 28,360 Lancaster County residents received Social Security benefits, according to the Social Security Administration. Payments to York County beneficiaries totaled about $122 million a month, and Lancaster County beneficiaries received about $58 million. Most are retired workers: 46,710 in York County and 22,700 in Lancaster County. Statewide, more than 1.3 million South Carolinians receive benefits.
How the Cut Would Work
CBO projects the cut would start at 26 percent in 2033 and reach 29 percent by 2036. It would ease to about 24 percent in the late 2040s before growing again, reaching 40 percent by 2100 if lawmakers change nothing.
The separate Disability Insurance Trust Fund is in much better shape. CBO does not expect it to run out until sometime after 2100. CBO’s standard analysis treats the two funds as one, and under that approach the combined balance lasts until fiscal 2033. The cut would then be 23 percent in 2034 and would grow to 37 percent by 2100.
Worse Than the Trustees’ Forecast
The CBO numbers are more pessimistic than those in the 2026 annual report from the Social Security Board of Trustees, which oversees the program’s finances. Both groups expect the retirement fund to run out in 2032. The trustees project a 22 percent cut after that, compared with CBO’s 26 percent. The trustees expect the combined funds to last until 2034, a year longer than CBO does.
Over the next 75 years, CBO puts the program’s shortfall at 4.57 percent of taxable payroll. The trustees put it at 4.42 percent.
Costs Outpacing Revenue
The shortfall comes from a gap between what Social Security collects and what it pays out. According to the CBO data, the program’s costs this year equal 15 percent of taxable payroll, which means all earnings subject to the Social Security payroll tax. Its tax revenue equals 12.9 percent. By 2032, costs rise to 16.5 percent of taxable payroll, while revenue barely moves.
In 1990, the program took in 12.7 percent of taxable payroll and spent 10.7 percent. By 2100, CBO projects costs will reach 21 percent of taxable payroll, with revenue at about 13.8 percent.
“The gap between Social Security’s outlays and revenues generally widens over the next 75 years,” CBO wrote in the report.
Measured against the whole economy, the 75 year shortfall equals 1.56 percent of gross domestic product.
What It Means for Workers in Their 40s and 50s
The biggest losses would fall on people who are still working. CBO assumes workers claim benefits at age 65. Workers born in the 1970s would start out with an average annual benefit of $25,500 in 2026 dollars under the benefit formula in current law. If benefits were limited to what the program could actually pay, that figure would drop to $19,800, a 23 percent reduction.
Workers born in the 1980s would see their average starting benefit fall from $28,000 to $22,100. People born in the 1990s would go from $31,800 to $24,100.
Many people born in the 1960s will have claimed benefits before the funds run out, so the cut would barely touch their starting checks. Their lifetime benefits would still come out 16 percent lower, because the cut would apply to payments they receive after 2033.
Congress has not taken up a plan to close the gap. Lawmakers’ main options are raising payroll taxes, reducing scheduled benefits, moving money in from general revenue, or some combination.
The full CBO data is posted at cbo.gov/publication/62556. County by county beneficiary figures for South Carolina are on the Social Security Administration’s website at ssa.gov/policy/docs/statcomps.
Sources: Congressional Budget Office, “CBO’s 2026 Long Term Projections for Social Security,” data workbook released Sept. 17, 2026; Social Security Administration, OASDI Beneficiaries by State and County, December 2025; Committee for a Responsible Federal Budget analysis, Sept. 21, 2026; Newsweek, Sept. 23, 2026.
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Thomas Hyslip lives in Tega Cay with his wife and daughter. After 27 years in the U.S. Army and Federal Law Enforcement, he retired to pursue his passion for teaching. Tom is now an Associate Professor of Instruction at the University of South Florida. In 2 short years he has won 10 awards from the South Carolina Press Association, including first place in column writing, education beat reporting and best podcast.
