Wisconsin Could Feel Significant Impact if Social Security Trust Fund Reach Shortfall by 2032

Tuesday, June 16th, 2026 -- 1:01 PM

(Lorin Cox, Wisconsin Public Radio) The Social Security trust fund is projected to reach a shortfall by the end of 2032, and Wisconsin could feel a significant economic impact if the insolvency leads to reduced benefit payments.

According to Lorin Cox with the Wisconsin Public Radio, the board of trustees that oversees Social Security expects that the amount of money the trust fund takes in from taxes will become lower than the amount it pays out in benefits, as more of the large baby-boom generation enters retirement. Social Security won’t run out at that point, but the government expects to have to cut benefits by 22 percent if it reaches depletion.

About one in five Wisconsin residents receive Social Security benefits, and University of Wisconsin-Madison risk and insurance professor Anita Mukherjee told WPR’s “Wisconsin Today” that this growing population is unevenly distributed across the state.

“The northern and rural counties have a lot higher older adult shares,” she said. “I think many more communities would be affected by changes in Social Security than a state that has less of that geographic variation.”

Mukherjee said one in seven retirees rely on Social Security for as much as 90 percent of their income. She doesn’t expect that the federal government will let the trust fund reach the point where a flat 22 percent cut in benefits is necessary, but that kind of income reduction could force seniors to rely on other social services.

“There’s Medicaid. There’s FoodShare, housing assistance, other things,” Mukherjee said. “But I would say, while the safety net exists, it’s patchier and more means-tested. It’s definitely more administratively burdensome than Social Security.”

To prevent the expected depletion by 2032, the federal government will have to find some combination of increasing the revenue it brings into Social Security or decreasing the benefits it pays out. Mukherjee said Congress could raise payroll taxes, change the taxable wage base, raise the retirement age or alter the benefit formula.

“I think if benefits have to be adjusted, many scholars would argue that the first priority should be protecting those who rely on it the most.” she said. “One option would be to change the burden of such a cut across the income distribution, like people who are relying on it for 90 percent [of their income], maybe we cut it less.”

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