📺 Stream EntrepreneurTV for Free 📺

Experts Predict a Massive Annual Drop in Social Security Benefits by 2033, According to a New Report The cuts could amount to more than $23,000 a year.

By Madeline Garfinkle

Key Takeaways

  • U.S. Social Security benefits could decrease significantly by 2033, affecting retirees' income.
  • Impacts vary, with higher earners facing larger cuts than lower earners.
entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The fate of Social Security benefits is a hot topic, with many Americans wondering just how much — if any — will be available when they decide to settle down for retirement. Now, a new report has put a dollar amount on the potential loss in Social Security benefits for Americans in 2033.

The analysis, conducted by the Committee for a Responsible Federal Budget, arises from the anticipation that the incoming payroll taxes, which fund the program, will fall short of covering retirees' monthly payouts.

According to their estimations, a typical dual-income couple entering retirement would experience a decrease of approximately $17,400 annually, translating to roughly $1,450 per month. Couples who have earned higher incomes throughout their careers might face reductions of around $23,000 in their benefits. Conversely, couples with lower earnings could encounter a more substantial decrease of about $10,600, which represents a greater proportion of their income.

Related: These Are the Top 10 States to Retire in 2023, According to a New Report — And Florida Didn't Make Top 5

The projected cuts in benefits stem from the prediction that, by 2033, the inflow of payroll taxes into Social Security's Old-Age and Survivors Insurance Trust Fund will fall short of what is necessary to maintain full benefits. Social Security operates on a "pay-as-you-go" model, meaning it lacks the ability to borrow to cover shortfalls.

In the past, reserves had grown, enabling the program to uphold benefits at the levels initially promised. However, these reserves are expected to be depleted within a decade due to fewer workers contributing to the system compared to the expanding number of retirees. Once the reserves are exhausted, benefits will need to be adjusted downward to align with available funds, unless policymakers make modifications to the program.

The last significant overhaul of benefits took place in 1983, which included a range of measures to secure the program's financial sustainability, such as gradually raising the retirement age from 65 to 67, implementing income taxation on a portion of benefits for higher-income recipients, increasing payroll tax rates for both employees and employers, incorporating federal employees into the system, and adjusting the cost-of-living adjustments.

Related: Gen Z Is More Confident About Retirement Than Boomers, Except When It Comes to One Thing

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

These Coworkers-Turned-Friends Started a Side Hustle on Amazon — Now It's a 'Full Hustle' Earning Over $20 Million a Year: 'Jump in With Both Feet'

Achal Patel and Russell Gong met at a large consulting firm and "bonded over a shared vision to create a mission-led company."

Business News

These Are the 10 Most Profitable Cities for Airbnb Hosts, According to a New Report

Here's where Airbnb property owners and hosts are making the most money.

Side Hustle

How to Turn Your Hobby Into a Successful Business

A hobby, interest or charity project can turn into a money-making business if you know the right steps to take.


Want to Be More Productive? Here's How Google Executives Structure Their Schedules

These five tactics from inside Google will help you focus and protect your time.

Starting a Business

This Couple Turned Their Startup Into a $150 Million Food Delivery Company. Here's What They Did Early On to Make It Happen.

Selling only online to your customers has many perks. But the founders of Little Spoon want you to know four things if you want to see accelerated growth.