A new report from the Committee for a Responsible Federal Budget (CRFB) warns that as Social Security turns 90, it’s “racing towards involvency,” with its retirement trust fund projected to become insolvent by late 2032, just seven years from now. For a typical dual-earner couple retiring just after insolvency, this would mean an $18,400 reduction in annual benefits.

Prior to Trump’s tax cuts, program trustees estimated insolvency around 2034. With the new tax changes, several independent analyses, including by the CRFB, now suggest the trust fund could run dry as early as 2032. When this happens, all beneficiaries would face an immediate and automatic benefit cut of around 24%, unless Congress acts to shore up the system.

Eliminating federal income taxes on Social Security benefits reduces program revenues by approximately $1.05 trillion to $1.45 trillion over a 10-year period (2025–2035). The lower figure is a Congressional Budget Office (CBO) estimate; the higher end comes from Penn Wharton.

Why the urgency? Social Security faces multiple long-term challenges:

• Demographic crunch: Fewer workers support more retirees. The worker-to-retiree ratio has plunged from 16.5:1 in 1950 to 2.7 as of 2023, straining payroll tax inflows.
• Longer lifespans: Americans are living longer, collecting decades of benefits.
• Declining birthrates and slowing immigration: Both trends reduce future payroll tax contributions.
• Political stalemate: Lawmakers repeatedly deadlock on fixes like raising payroll taxes, increasing the retirement age, or trimming benefits.

What Americans need to know

The headlines about reducing Social Security taxes offer short-term relief, but Americans should also consider the long-term arithmetic. Social Security is not at risk of vanishing outright — payroll taxes will keep partial payments flowing — but absent reforms, retirees could see sharp benefit cuts within a decade. The changes Trump signed will put more money in seniors’ pockets now, but may worsen the program’s finances for their children and grandchildren.

Key takeaways:

• Seniors will pay less (often no) federal tax on Social Security, starting now.
• The solvency crisis is now likely to arrive sooner — with potential benefit cuts by 2032 unless new revenue or reforms are enacted.
• Younger Americans may face higher payroll taxes, later retirement ages, or both, to sustain future benefits.
• The political fight over a permanent fix has just begun, and voters should watch closely for real solutions, not just campaign slogans.

While Social Security remains a safety net for approximately 70 million Americans, it stands at a crossroads — and despite the presidential optimism, its long-term stability depends on tough choices that Washington, so far, has chosen to avoid.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.