Social Security Scenario Puts Payroll Tax at 17.3% if Action Waits Until 2034

A Social Security solvency scenario would raise the combined payroll tax rate to 17.3% starting in 2034 if substantial action is deferred until then, a modeled change rather than enacted policy.

The calculation covers Old-Age, Survivors, and Disability Insurance (OASDI), combining retirement, survivor and disability benefits for the projection. The current combined payroll tax rate is 12.4%. Raising it to 17.3% would add 4.9 percentage points, a 39.5% increase in the rate. It is one modeled path to keeping the combined program solvent through 2100.

Employees now pay 6.2% on covered earnings, and employers pay another 6.2%. The earnings cap is $184,500 in 2026 and will rise to $192,300 in 2027. The 17.3% scenario applies to covered wages generally; it does not set a separate rate for millennials or Gen Z.

The combined program’s reserves are projected to run out in the third quarter of 2034. Continuing income would cover 83% of scheduled benefits at that point. That projection assumes a change in law allowing transfers between the legally separate retirement and disability trust funds.

The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivor benefits, faces an earlier deadline. Its reserves are projected to run out in the fourth quarter of 2032. Continuing income would then cover 78% of scheduled benefits, leaving a 22% funding gap if financing does not change. The fund would continue receiving revenue.

The timing of a financing change matters to the modeled tax rate. A separate illustration with changes taking effect in January 2026 used a 16.65% combined payroll tax rate to show 75-year solvency. The 17.3% figure applies to the scenario in which substantial action waits until 2034. Neither rate has been enacted.

Meanwhile, Social Security’s 2027 cost-of-living adjustment will raise benefits by 3.6%. The estimated average retired worker’s monthly payment will increase by $75, from $2,095 to $2,170, in January. The adjustment applies to nearly 72 million beneficiaries but does not resolve the projected funding gaps. Increased Supplemental Security Income payments begin Dec. 31, 2026.