New AARP Research Finds Social Security Revenue Depleted Due To Major Economic Changes

WASHINGTON – Social Security will be able to pay only about 80 percent of scheduled retirement and survivor benefits in 2032, unless Congress tackles how it’s financed.  New research released today by the AARP Public Policy Institute from Vice President of Financial Security Rich Johnson explores the shrinking share of the American economy subject to the payroll taxes that fund Social Security.

In 1983, taxable earnings equaled 41 percent of gross domestic product, but by 2025, that share had fallen to 34 percent and is expected to remain near that level for decades. AARP's research estimates that if the share had stayed at 41 percent, Social Security could have paid full benefits until 2059.

“Social Security’s finances have weakened in large part because the economy has changed while its revenue system has not,” Johnson says. “Policymakers have options to explore to shore up its financing, including raising or eliminating the taxable earnings cap and applying targeted contributions to certain forms of capital or business income. The vast majority of people in America do not want their hard-earned benefits to be cut, and Congress should explore every option to avoid this.”

The economic trends discussed in this new research have weakened Social Security’s revenue stream. If the share of GDP subject to payroll taxes had remained at its 1983 level, Social Security would have collected an estimated $10.8 trillion more in revenue before the depletion of the trust fund.

“Strengthening Social Security does not require recreating the economy of 1983,” Johnson said. “It just means updating Social Security’s financing to reflect how Americans receive income today and ensuring that people working today can count on the Social Security they've earned in their retirement.”

In AARP’s post-election polling, 80 percent of all voters, and 90 percent of older voters, said it is very or extremely important for Congress to protect Social Security from cuts. The newly elected Members of Congress in the 2026 midterms owe it to their constituents to protect against cuts. Newly elected Senators will still be serving in 2032, when lawmakers will be under heightened pressure to protect the program’s ability to pay full benefits – if they do not address Social Security’s future sooner.

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About AARP

AARP is the nation's largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence, AARP strengthens communities and advocates for what matters most to the 125 million Americans 50-plus and their families: health and financial security, and personal fulfillment. AARP also produces the nation's largest-circulation publications: AARP The Magazine and the AARP Bulletin. To learn more, visit aarp.org, aarp.org/espanol or follow @AARP, @AARPLatino and @AARPadvocates on social media.

Media Contact: Kevin Glass, kglass@aarp.org