Social Security could pay full benefits until 2059, AARP finds
Taxable payroll has shrunk from 41% of GDP in 1983 to 34% in 2025. Had it kept pace with the economy, AARP says the trust funds could pay full benefits until 2059 — 25 years beyond the projected 2034 depletion date.
A 25-year difference
Social Security could pay full benefits until 2059 if the payroll taxes that fund it had kept pace with the size of the US economy, according to a new report from the AARP Public Policy Institute. That is 25 years beyond the 2034 date when the program's combined trust funds are now projected to run out.
The report says the program would have collected $10.8 trillion more between 1984 and 2034 if taxable payroll had stayed at its 1983 share of the economy. The figure is in inflation-adjusted 2025 dollars.
Why the revenue share shrank
Taxable payroll — the wages subject to Social Security taxes — has fallen from 41% of gross domestic product in 1983 to 34% in 2025, a level the trustees project will stay in place. AARP traces the drop to a shift from wages toward business and investment income, which is generally not subject to payroll taxes.
Automation has reduced demand for workers, the report says, and pass-through businesses let some owners report pay as profits rather than wages. Rising inequality also plays a role: the payroll tax cap no longer covers 90% of earnings, the share lawmakers expected in 1983. The covered share fell to around 83% in 2000 and has mostly stayed there since.
An aging population adds pressure. The ratio of workers to beneficiaries is projected to fall from 3.4 in 2000 to 2.4 in 2030, as fertility rates decline.
- Full benefits until2059, not 2034
- Taxable payroll share of GDP41% in 1983, 34% in 2025
- Payable at depletion83% of scheduled benefits
What depletion would mean
The Social Security trustees projected in June that the combined retirement and disability trust funds may be depleted in the third quarter of 2034. At that point, incoming revenue would cover 83% of scheduled benefits.
The retirement fund alone is projected to run out earlier, in the fourth quarter of 2032, when 78% of benefits would be payable. Reuters reported that the combined payable share would keep falling, to 65% by 2100.
The shortfall is worse than lawmakers expected in 1983, when the last major reforms were enacted. Research cited by AARP says those changes cut lifetime retirement benefits by about 19% for people turning 65 in 2026, compared with the earlier rules.
Ways to close the gap
In 2026, only wages up to $184,500 are subject to the payroll tax. The cap rises to $192,300 in 2027. Just 6% of people had earnings at or above the cap in 2024, according to AARP, so raising it would leave most workers untouched.
Bills in Congress would lift the cap to $250,000 or $400,000, or remove it entirely. AARP says removing the cap would close 67% of the 75-year funding gap, if workers get no benefit increase in exchange.
Lawmakers could also tax income that payroll taxes do not reach. AARP cites actuaries' research showing a new 12.4% tax on investment income for active S corporation officers and limited partners would close about 25% of the gap.
Payroll taxes supplied 91% of Social Security's revenue in 2025, with 5% from interest and 4% from income taxes paid by higher-income beneficiaries on their benefits. The trustees estimated that lifting the combined payroll tax rate to 16.65% from January 2026 would have kept the program solvent through 2100. A February survey of 2,509 adults found 62% would support raising the rate gradually from 6.2% to 6.5%.
"The fix for Social Security isn't cutting earned benefits; it's rebuilding the revenue behind them," said Richard Johnson, vice president of financial security at the AARP Public Policy Institute.
