The 2026 Social Security and Medicare Trustees Report: What Advisors Need to Know

Every year, the Boards of Trustees for Social Security and Medicare release their assessment of where these programs stand financially.

For those of us who advise clients on claiming strategies, Medicare enrollment, and retirement income planning, the annual report is more than a headline about "trust fund depletion." It is a roadmap of the assumptions, dates, and policy pressures that shape the conversations we have with clients every day.

The 2026 report, with assumptions set in February 2026, carries some meaningful changes from last year. Below is a breakdown of what moved, why it moved, and how to talk about it with the people who rely on your guidance.

The Headline Dates Moved Earlier

Let's start with the numbers your clients are most likely to ask about.

The Old-Age and Survivors Insurance (OASI) Trust Fund—the fund that pays retirement and survivor benefits—is now projected to pay full scheduled benefits until the fourth quarter of 2032. That is one quarter earlier than last year's projection. When that reserve is depleted, continuing program income would cover 78 percent of scheduled benefits.

The Disability Insurance (DI) Trust Fund remains the bright spot. It is projected to pay full benefits through at least 2100, the end of the projection window. DI actually improved slightly this year.

When the two Social Security funds are considered together as the theoretical combined OASDI fund, the depletion date holds at the third quarter of 2034, unchanged from last year. At that point, income would cover 83 percent of scheduled benefits. It's worth reminding clients—and being precise about this yourself—that the two funds cannot legally be combined without an act of Congress. The combined figure is an illustration of the program's overall health, not a description of how the money actually flows.

On the Medicare side, the Hospital Insurance (HI) Trust Fund, which pays for Part A inpatient and post-acute care, is now projected to pay full benefits until the second quarter of 2033—again, one quarter earlier than last year. At depletion, income would cover 89 percent of scheduled HI benefits.

The Supplementary Medical Insurance (SMI) Trust Fund, which covers Part B and Part D, is in a different category entirely. By law, its financing is reset every year through beneficiary premiums and federal contributions so that it is always adequately funded. SMI does not "run out." But, as we'll discuss, that automatic financing comes with its own pressures.

Why the Outlook Worsened

The more useful question for an advisor isn't just when but why. Three factors drove the deterioration in the combined Social Security outlook this year, and understanding them helps you explain to clients that these projections move for concrete, identifiable reasons.

First, a lower fertility assumption. The Trustees lowered the assumed ultimate total fertility rate from 1.90 children per woman to 1.75. Fewer future births means fewer future workers paying into the system, which lowers projected taxable payroll over the long horizon.

Second, lower immigration assumptions. Estimated historical and assumed future net immigration came in lower this year. Like the fertility change, this reduces the projected size of the future workforce and the payroll that supports the program.

Third, the One Big Beautiful Bill Act (OBBBA). Enacted July 4, 2025, the OBBBA made permanent the lower income tax rates and brackets from the 2017 Tax Cuts and Jobs Act, made the larger standard deduction permanent, and added a temporary additional standard deduction for taxpayers over 65. Because some Social Security benefits are subject to income tax, and because that tax revenue flows back into the trust funds, lower income tax rates mean lower future revenue flowing to OASI, DI, and HI.

That third point deserves a moment of attention from advisors. The taxation of Social Security benefits is something clients frequently misunderstand or resent, but the revenue it generates is woven directly into the program's financing. When tax law changes how benefits are taxed, it changes the trust funds' income. The 2026 report is a clear illustration of that linkage.

The same OBBBA effect, along with higher assumed utilization of certain provider services and upward revisions to Medicare Advantage per-capita spending, worsened the HI outlook as well.

The Long-Range Picture: Actuarial Deficits

Beyond the depletion dates, the report measures each fund's health over the full 75-year window (2026–2100) through its "actuarial balance," expressed as a percent of taxable payroll. A negative balance is a deficit.

• OASI: a deficit of 4.55 percent of taxable payroll, up from 3.95 percent last year.
• DI: a surplus of 0.13 percent—DI is in actuarial balance.
• Combined OASDI: a deficit of 4.42 percent, up from 3.82 percent last year.
• HI (Medicare Part A): a deficit of 0.56 percent, up from 0.42 percent last year.

What does a 4.42 percent OASDI deficit mean in plain terms? Roughly, achieving balance over the full period would require an immediate and permanent payroll tax increase of that magnitude, or an equivalent benefit reduction, or some combination—starting now. And the Trustees note that even such a change would leave the funds declining toward depletion at the very end of the period; truly stabilizing reserves would require larger adjustments. The longer lawmakers wait, the steeper the required change becomes.

This is the single most important framing point for clients: the shortfall is real and growing, but it is a financing gap, not a collapse. Even in the absence of any congressional action, the program continues to take in payroll taxes and pay out the large majority of scheduled benefits.

What Clients Hear vs. What Is True

The phrase "Social Security is going broke" is both the most common thing your clients have heard and one of the least accurate. The reports are clear that after reserve depletion, incoming payroll taxes would still fund 78 percent of OASI benefits and 83 percent of combined benefits. For Medicare Part A, income would cover 89 percent at depletion.

By 2100, under current law and absent reform, the percentages drift: OASI scheduled benefits payable decline toward 62 percent, combined OASDI toward 65 percent, and HI recovers toward 93 percent. These are sobering numbers, but they describe a program that continues operating at reduced capacity, not one that disappears.

For a 60-year-old client anxious about whether benefits will "be there," the honest answer is yes—the more precise planning question is whether to assume full scheduled benefits or to stress-test a retirement plan against a future reduction. That is a far more productive conversation than reacting to a depletion headline.

The Medicare Funding Warning

One item that often gets overlooked deserves a flag. The law requires the Trustees to issue a determination of "excess general revenue funding" whenever federal general-revenue contributions are projected to fund more than 45 percent of total Medicare costs within the next seven fiscal years. The 2026 report projects that threshold is reached in fiscal year 2026—the tenth consecutive such determination.

Two consecutive determinations trigger a formal "Medicare funding warning," which legally requires the President to propose responsive legislation and Congress to consider it on an expedited basis. This is now the ninth consecutive year a funding warning has been issued. The recurring nature of the warning underscores a structural reality: Medicare increasingly leans on general taxpayer revenue rather than dedicated payroll taxes and premiums, particularly as Part B and Part D costs grow faster than Part A.

The SMI Premium Pressure

While SMI cannot run out of money, its growth shows up directly in clients' pockets, which makes it the most personally relevant Medicare figure for IRMAA-focused advisors.

For 2026, the standard Part B premium is $202.90 per month. Higher-income beneficiaries pay income-related adjustment amounts on top of that—in 2026, ranging from an additional $81.20 to $487.00 per month, depending on modified adjusted gross income. The IRMAA thresholds begin at $109,000 for individual filers and $218,000 for joint filers.

On the Part D side, the 2026 base beneficiary premium is $38.99 per month, though actual basic-benefit costs are projected to average around $27, depending on the plan selected. Part D IRMAA surcharges range from an additional $14.50 to $91.00 per month at the same income thresholds.

For advisors working with clients near those thresholds, the report is a reminder that SMI costs—and therefore IRMAA exposure—are on a steep upward path. SMI spending is projected to climb from 2.6 percent of GDP in 2026 to 4.5 percent by 2050 and 5.5 percent by 2100. Part D in particular is projected to run substantially higher than last year's report anticipated, driven by increased utilization of expensive specialty drugs and higher cost trends. Income planning that manages MAGI around the IRMAA brackets is only going to grow in value to clients.

What Happened in 2025

A few operational figures help ground the projections. At the end of 2025, 62.3 million people received OASI benefits, 8.2 million received DI benefits, and 69.3 million were enrolled in Medicare.

The OASI Trust Fund spent more than it took in during 2025—cost exceeded income by $200 billion—and drew down reserves accordingly, ending the year at $2,338.3 billion. This drawdown is not new; OASI has been spending from reserves since 2021, and the Trustees expect costs to exceed income in every future year. DI, by contrast, ran a surplus and grew its reserves. On the Medicare side, HI took in slightly more than it spent in 2025, but annual deficits are projected to return in 2027 and persist through depletion.

Practical Takeaways for Your Practice

Translating this report into client conversations, a few themes stand out.

Frame depletion accurately. Lead with the distinction between "depletion" and "insolvency." Clients who understand that the program continues paying the majority of benefits make calmer, better claiming decisions than those operating on fear.

Revisit claiming-strategy stress tests. For clients within a decade or so of the 2032–2034 window, it can be worth modeling a scenario with a benefit haircut to see how sensitive their plan is. In most cases, the value of delayed claiming and survivor-benefit optimization holds up even under a reduced-benefit scenario, because those strategies improve the relative value of whatever benefits are ultimately paid.

Connect tax law to benefits. The OBBBA's effect on trust fund revenue is a concrete teaching moment. It shows clients that tax policy and benefit financing are linked, and it sets up productive conversations about the taxation of their own benefits.

Elevate IRMAA planning. With SMI costs rising faster than the rest of Medicare and Part D running hot, MAGI management around the IRMAA thresholds is increasingly central to retirement-income planning, not a footnote.

Resist the urge to predict legislation. The Trustees repeatedly stress that acting sooner allows a broader, gentler range of solutions. But the specific fix—tax increases, benefit adjustments, changes to the retirement age, or some blend—is a political question. Advisors serve clients best by planning around the facts in the report rather than speculating about which reform path Congress will take.

The Bottom Line

The 2026 Trustees Report tells a now-familiar story with a few new wrinkles: depletion dates inched earlier for OASI and HI, the long-range deficits widened, and demographic shifts plus the OBBBA's revenue effects drove most of the change. DI remains healthy, SMI remains funded by design but increasingly expensive, and Medicare's reliance on general revenue continues to trigger statutory funding warnings.

None of this changes the core message we deliver as advisors: Social Security and Medicare are facing genuine, well-documented financing challenges that will eventually require legislative action—but they are not vanishing, and clients planning today are planning around programs that will continue to pay the large majority of scheduled benefits. The advisors who can hold both of those truths at once, calmly and accurately, are the ones clients trust most.

This summary is based on the 2026 Annual Reports of the Social Security and Medicare Boards of Trustees. The assumptions underlying these projections were set in February 2026 and are subject to revision in future reports. This article is for educational purposes and does not constitute individualized financial, tax, or legal advice.