President Donald Trump’s “One, Big, Beautiful Bill” (OBBBA), signed into law on July 4, 2025, has sparked significant controversy, especially regarding its impact on Social Security’s trust funds. Critics warned that the bill would hasten the depletion of Social Security funds, and recent reports confirm their concerns.
Since 2021, the costs of Social Security’s retirement program, known as Old-Age and Survivors Insurance (OASI), have exceeded its income, primarily sourced from FICA taxes that fund both Social Security and Medicare. To cover the gap, the OASI Trust Fund has been tapped, but projections show that it will run out of funds by 2034.
The Social Security disability program remains financially stable due to its separate trust fund, though many anticipate that funds from this program will be redirected to assist the retirement program once the OASI Trust Fund is exhausted.
The combined Social Security trust funds are now expected to run out of money by early 2034, instead of mid-year, due to the impact of Trump’s bill.
How Trump’s Bill Hastens the Timeline
The bill, which makes permanent the tax cuts and adjusted tax brackets introduced in 2017 under the Tax Cuts and Jobs Act, will have far-reaching effects on Social Security.
It also temporarily increases the standard tax deduction for individuals aged 65 and older, among other adjustments. While these changes aim to lower taxes, they also result in a reduction of revenue flowing into Social Security.
The Social Security Administration (SSA) estimates that Trump’s bill will cost the OASI Trust Fund $168.6 billion between 2025 and 2034.
This acceleration means that instead of running out of funds in early 2033, the OASI Trust Fund will likely be depleted by late 2032. The combined Social Security trust funds are projected to run dry in early 2034.
Should Retirees Be Concerned?
With the trust funds running out sooner than expected, many retirees may worry about potential benefit cuts. The most likely scenario is a 23% reduction in benefits once the funds are depleted. However, retirees likely need not panic just yet.
While the financial outlook for Social Security is troubling, lawmakers are well aware that allowing large benefit cuts to occur would have devastating political consequences.
As a result, various proposals to reform Social Security and ensure its solvency have been discussed over the years. It’s highly probable that Congress will enact some form of reform before the trust funds are exhausted, potentially mitigating the impact of any benefit reductions.
The $23,760 Social Security Bonus Most Retirees Miss
Many retirees may not be aware of little-known “Social Security secrets” that could boost their retirement income. If you’re behind on your retirement savings, these strategies might help ensure a financial cushion as you head into retirement, even amidst the uncertainty surrounding Social Security’s future.
