Social Security/Medicare 2026 Annual Trustees’ Report Released

On June 9, the Trustees reported that the Retirement Trust Fund is predicted to be depleted in the 4th quarter of 2032, one quarter earlier than last year’s estimate, at which point 78% of promised benefits would be payable.

The Disability Trust Fund is healthier than a year ago, and good through the 75-year actuarial projection period. This is largely due to historically low disability benefit claim receipts, attributed in part to changes in the nature of work. I expect that extreme difficulty accessing SSA services by phone, at field offices, and at hearing offices, contributes to the decline in claims filed.

If Congress passed legislation to combine the Retirement and Disability funds, they could pay full benefits until the 3rd quarter of 2034, then 83% of promised benefits, up from 81% last year.

The Medicare Hospital Insurance Trust Fund is projected to be depleted in the 2nd quarter of 2033, one quarter earlier than last year. Do you think that the accelerating privatization of Medicare has something to do with that? Officially, the reason most often given is that there is more utilization of services than expected.

There is no reason that Congress should have to transfer funds between the Retirement and Disability Trust Funds as they have done twice, most recently in 2016. Any Social Security reform legislation should provide for combining them. Writers use the variance in Trust Fund depletion dates, depending on whether the Retirement and Disability Trust Funds are treated separately or together, to make it appear that the situation is either better or worse, which sows confusion among readers. In the past, too many of those opposed to disability insurance have mischaracterized disabled beneficiaries as lazy cheats, and not a legitimate part of what they call Social Security. Practically and morally, the fate of all participants should be decided collectively, and equitably.

Candidate Trump promised not to touch Social Security or Medicare.

The Trustees’ data, collected through February 2026, reveals some of the damage already inflicted in just the first year of his second term.

His Big Ugly Bill raised the standard income tax deduction, which reduces income to the Social Security and Medicare Trust Funds derived from taxation of benefits, without replacing it. That alone, accounts for the Trustees’ Report change in the Retirement Trust Fund expiration date, from last year’s 1st quarter of 2033, to this year’s 4th quarter of 2032. The opponents of social insurance will be happy to use 2032, rather than 2033, as the year to fear in their privatization missives.

The Report reveals that Gross Domestic Product and total earnings grew faster than predicted. We know that the ultra wealthy reaped the lion’s share of this income growth, and the Social Security Trust Funds did not benefit much, because of the cap on yearly earnings subject to the Social Security payroll tax, currently $184,500. If not for the explosion in income inequality since Social Security funding was last addressed in 1983, there would be no funding gap.

Reducing Federal employment by 238,000 last year cost the Trust Funds a lot in tax contributions, from the Government as an employer and from its dwindling workforce. Trump’s anti-labor Department of Labor and Nation-al Labor Relations Board appointees suppress unions, and thereby limit the wage gains they can bargain for, again costing the Trust Funds.

The projected fertility rate of 1.9 children per woman in last year’s report was reduced to 1.75 this year. Many Americans are choosing to delay or abandon plans to have children for economic reasons, exacerbated by growing income inequality, tariffs, and war.

The Report identified lower net immigration as a factor. It means fewer workers pay into the system, and that significantly affects the health of the Trust Funds. Undocumented immi-grants pay into the system, but cannot receive benefits.

Social Security’s Chief Actuary, Karen Glenn, addressed the Report in a June 11 webinar presented by the National Academy of Social Insurance (NASI). After identifying the changes from last year, she said that 75-year solvency can be achieved by raising revenue by 1/3, by cutting benefits by 1/4, or a combination of the two. A 4.4% increase in taxable payroll now would achieve 75-year solvency by itself. She said that the higher fertility rate of immigrants, and the fact they typically arrive here as workers, has a huge impact.

In the webinar, AARP’s Joel Eskovitz said that two-thirds of beneficiaries rely on Social Security for up to 50% of their retirement income, and that Americans don’t want cuts or raises in the retirement age. According to Eskovitz, the educated and wealthy live longer now, but not the rest of us. He said that last year’s NASI/AARP survey confirmed that people are willing to pay more, even if they are not wealthy, with capital gains the most popular source. Increased income, and no cuts, were preferred by 85% of respondents. Most of those surveyed did not know there was a cap on earnings subject to the payroll tax, and support scrapping that cap.

Labor economist Theresa Ghilarducci said that 63 million workers have no retirement plan available to them. She opposes any benefit cuts, and advocates for broadening the Trust Funds’ income base by taxing investments, saying that legacy wealth should pay for legacy debt.

Comprehensive legislation to reform Social Security has been championed by Senator Bernie Sanders and by Congressman John Larson, among others, in recent years, but nothing will happen in this Congress. New bills will need to be introduced in the new Congress when it is installed in January. It matters what that Congress looks like. No closed-door commissions, no cuts, make the rich pay their fair share. Scrap the Cap!