Will Trust Fund Depletion Shrink Your Social Security COLA?

The short answer for your COLA

Trust fund depletion would not, by itself, cancel Social Security COLAs. Under current law, the annual COLA formula tied to the CPI-W would still operate, and SSA would still announce annual COLAs. The painful part is different: if Congress does not change the law before the Old-Age and Survivors Insurance trust fund is exhausted, the COLA would be applied to a smaller payable benefit.

The June 9, 2026 Social Security Trustees update, as analyzed by the Committee for a Responsible Federal Budget, projects the OASI trust fund to be exhausted in the fourth quarter of 2032. At that point, incoming revenue would cover about 78% of scheduled retirement and survivor benefits, implying an across-the-board cut of roughly 22% if no legislation intervenes.[1] On a combined OASI plus Disability Insurance basis, AARP summarizes the projection as 2034 depletion, about 83% payability, and a roughly 17% cut, with the DI trust fund projected to remain solvent through 2100.[2]

Last verified: August 25, 2026.

Why one headline says 22% and another says 17%, 24%, or 28%

These numbers are not interchangeable. Some describe the retirement and survivor trust fund alone. Some combine retirement, survivor, and disability funds. Some are older estimates. Some come from a different budget model. Before you use any cut figure in a household plan, check what fund and what year it is measuring.

What depletion changes in the COLA math

A COLA is a percentage increase. That percentage has to be applied to a benefit amount. Depletion does not rewrite the COLA percentage formula; it changes the benefit amount that would actually be payable if the trust fund can no longer cover scheduled benefits in full.

A simple hypothetical shows the difference. Suppose a retiree has a scheduled monthly benefit of $2,000 when an across-the-board 22% payable-benefit reduction takes effect. The payable check would fall to $1,560. If a later hypothetical COLA were 3%, the dollar increase on $1,560 would be $46.80, not the $60 increase that would have applied to the unreduced $2,000 scheduled benefit. The COLA percentage is the same in both cases; the base is not.

That distinction matters because families often hear “trust fund runs dry” as “the deposit stops.” The projection is not zero. It is also not harmless. CRFB’s state-by-state analysis, using its older 24% cut assumption, estimated a national average monthly cut of about $500, with state averages ranging from $459 to $556, and estimated that a typical couple retiring in 2033 would lose about $18,400 a year.[3] Those dollar examples should be read with the caveat in the table: the 2026 Trustees’ OASI-only projection is now roughly 22%, not the older 24% map assumption.

For a household budget, the order is the thing to keep straight: first the scheduled benefit is reduced to the amount current revenue can pay, then future COLAs increase that smaller amount. That is why trust fund depletion would shrink the dollar value of future COLAs even though it would not suspend COLA announcements.

If you want the narrower statutory-formula discussion, see Can the 2027 Social Security COLA Be Cut? Your Check Can. If you want the enacted-cut framing, see What the 2033 Social Security Benefit Cut Actually Means.

Why the 2026 forecast got worse

The one-year-earlier OASI depletion date did not appear out of nowhere. The Trustees’ updated assumptions include lower ultimate fertility, reduced temporary and undocumented immigration assumptions, and lower projected income-tax revenue on benefits tied to the One Big Beautiful Bill Act. CRFB reports that the ultimate fertility assumption fell from 1.9 to 1.75 children per woman, and CNN reported that SSA’s chief actuary estimated the law would reduce income-tax revenue on benefits by roughly $170 billion over a decade.[1][4]

The larger backdrop is familiar but still important. The Bipartisan Policy Center reports that the number of workers per OASI beneficiary fell from 5 to 1 in 1960 to 2.9 to 1 in 2026, and is projected to reach 2.2 to 1 by the 2070s. It also reports that the share of covered wages subject to the payroll tax has fallen from 90% in 1983 to 83% today.[5]

That is why the annual Trustees update deserves more attention than a one-day headline. BPC puts Social Security’s 75-year shortfall at roughly $30 trillion to $31 trillion, equal to 4.42% of payroll, up 16% from last year and the largest shortfall since 1977.[5] Those figures do not tell any one retiree what next month’s deposit will be, but they explain why the projected exhaustion date can move when assumptions change.

What does not belong in the depletion number

A smaller trust-fund-payable benefit is not the same issue as Medicare Part B premiums, federal income taxes, or whether the CPI-W fully reflects older adults’ expenses. Those can all affect how much breathing room a COLA creates, but they are separate from the depletion projection.

For the deposited-check side of the question, use the narrower explainers: Why Medicare Part B Hold-Harmless Keeps Your COLA Check Flat, Will taxes eat part of your 2027 Social Security COLA?, and Does Social Security COLA keep up with inflation for seniors?.

The same caution applies to 2027 COLA talk. The Senior Citizens League’s 3.6% estimate is a forecast, not the official COLA. The official 2027 COLA announcement is expected on October 14, 2026; for timing details, use When Will the 2027 Social Security COLA Arrive?.

How to use this in a household budget

For planning, do not pencil in a zero Social Security check. That is not what the 2026 Trustees projection says. Also do not assume the current scheduled benefit is guaranteed in full without legislation. The current-law risk is a payable-benefit reduction, followed by COLAs calculated on that lower base.

• Use your current benefit amount as the starting point, then stress-test what a roughly 22% reduction would mean for rent, utilities, groceries, prescriptions, transportation, and Medicare costs.
• If you help a parent with bills, separate fixed expenses from flexible spending. A projected cut hurts most where the bill cannot be delayed or reduced.
• If Medicare premiums are already straining the monthly deposit, review cost-relief programs before a crisis month. A useful starting point is Medicare Savings Program Money Most Seniors Leave Unclaimed.

This is benefits-literacy information, not financial advice. Projections change every year, and TSCL’s 3.6% 2027 COLA figure is only a forecast until the October 14, 2026 official announcement. As of the 2026 Trustees update, projected OASI depletion would shrink payable benefits and therefore shrink the dollar value of any future COLA, but it would not stop Social Security checks or suspend annual COLA announcements.

References

1. Analysis of the 2026 Social Security Trustees’ Report — Committee for a Responsible Federal Budget, June 9, 2026.
2. Social Security Trust Fund Report 2026 — AARP.
3. No State Spared — Committee for a Responsible Federal Budget.
4. Social Security trust fund will run out in 2032, trustees report says — CNN, June 9, 2026.
5. 2026 Social Security Trustees Report Explained — Bipartisan Policy Center.