Social Security could pay full benefits until 2059 if taxable payroll kept pace with GDP: AARP report

Social Security 's taxable payroll, which provides most of the revenue for the program that pays monthly benefits to millions of Americans, has fallen as a share of gross domestic product over the past four decades, according to a new report from the AARP Public Policy Institute.

"America's economy is larger and more productive than it was four decades ago, but Social Security is receiving support from a smaller share of that economy," Johnson said.

Social Security's trustees projected in June that the program's combined retirement and disability trust funds may be depleted in the third quarter of 2034. Unless Congress takes action, 83% of scheduled benefits will be payable at that time, according to the trustees' projections.

The trustees' report also included an earlier projected depletion date for Social Security's retirement trust fund — the fourth quarter of 2032, when 78% of benefits would be payable. However, the AARP said it based its analysis on the later 2034 date because Congress has shifted money between the funds in the past.

The program's current shortfall is worse than lawmakers had anticipated in 1983, when the last major Social Security reforms were enacted.

AARP points to an aging population as another reason for Social Security's funding challenges. The worker-to-beneficiary ratio will fall from 3.4 to 2.4 between 2000 and 2030. Falling fertility rates are also shrinking the worker-to-beneficiary ratio.

Shifting income patterns have also meant that a smaller share of U.S. GDP is subject to the Social Security payroll tax. Taxable payroll has fallen from 41% of GDP in 1983 to 34% as of 2025, a level Social Security's trustees project will remain, according to the AARP.

AARP attributes the decline to a shift from wages toward business and investment income, which generally isn't subject to payroll taxes. Automation has reduced demand for workers, and pass-through businesses allow some owners to report compensation as profits rather than wages, according to the report.

Social Security would have collected $10.8 trillion in additional funding between 1984 and 2034 if taxable payroll had stayed at 41% of GDP, according to the AARP. That figure is in inflation-adjusted 2025 dollars.

In 2026, up to $184,500 in wages are subject to the Social Security payroll tax.

To increase Social Security's revenues, lawmakers may consider changes that make high-income taxpayers contribute more to the program while sparing low- to moderate-income taxpayers, according to the AARP report.

"The fix for Social Security isn't cutting earned benefits; it's rebuilding the revenue behind them," Johnson said.

Raising the payroll tax threshold — which is incrementally adjusted each year to keep up with average wages — would not affect most workers, since just 6% of individuals had earnings at or above the cap in 2024, according to the AARP.

In 2027, the Social Security taxable maximum is set to increase to $192,300.

Another option: Lawmakers may also shore up the program by taxing income not currently subject to Social Security payroll taxes, according to the AARP, following an increase in business activity through pass-through entities — such as sole proprietorships, partnerships, limited liability companies and S corporations .

A national survey conducted in February found 62% of individuals would support gradually increasing the payroll tax from 6.2% to 6.5%, according to the University of Maryland School of Public Policy. That poll included 2,509 adults.

The 1983 Social Security reforms included changes to benefits, such as gradually raising the retirement age from 65 to 67, delaying the cost-of-living adjustment by six months and taxing Social Security benefits.

While the AARP has not endorsed any specific benefit changes, Jones said the organization opposes cuts to monthly checks.

"Millions of Americans — we hear from them every day — cannot afford to lose a penny," Jones said.