Social Security's future and what it means for FERS retirees

By the OnPAR Federal Retirement Education editorial team · Last updated November 2, 2026

Related: FERS pension · FERS supplement · TSP withdrawal options · Social Security and FERS · FERS for Veterans

The 2026 Social Security Trustees Report projects that the retirement and survivors trust fund (OASI) can pay 100% of scheduled benefits until late 2032. After that, incoming taxes would cover about 78%. Combined with the disability fund, reserves would last until the third quarter of 2034, then cover about 83% [1]. Benefits wouldn't drop to zero. Congress can change the outcome, and the Trustees urge it to act soon [1].

The key numbers from the 2026 report

Source: 2026 Trustees Report summary [1]. The two Social Security funds can't legally be combined without a change in law. The combined figure is used to show the program's overall status [1].

Why the outlook worsened this year

The Trustees name three main reasons the long-range picture got worse [1]:

• A lower assumed long-run fertility rate: 1.75 children per woman, down from 1.90.
• Lower estimated and assumed net immigration.
• The One Big Beautiful Bill Act (July 4, 2025). Its lower income tax rates, bigger standard deduction and temporary extra deduction for people over 65 reduce the income tax on benefits that flows back into the trust funds.

Some 2025 context: at the end of 2025, 62.3 million people received OASI benefits. OASI reserves were $2,338.3 billion, down $200.0 billion during the year. Combined Social Security cost exceeded income by $160.2 billion [1].

What "depletion" does and doesn't mean

Depletion means the reserves run out, not that payments stop. Under current law, Social Security can only pay what its income and reserves cover, and it can't borrow. So without new legislation, benefits after depletion would be cut to what payroll taxes and other income support. That's the 78% (OASI) or 83% (combined) figure [1]. The Trustees say lawmakers have many options to close the gap, such as raising revenue or lowering scheduled benefits, and that acting sooner allows changes to be phased in [1]. Nobody knows which changes, if any, Congress will make. We don't guess at them here.

What it means for FERS retirees

Your FERS pension is paid by OPM, not Social Security

The FERS basic annuity is computed from your high-3 and years of service and is paid by OPM [2][5]. The Trustees Report covers the Social Security and Medicare trust funds [1]. It doesn't project the federal retirement fund. A Social Security shortfall wouldn't change the FERS pension formula. Any change to FERS would need its own legislation.

The FERS supplement

OPM calls the supplement part of your FERS employee annuity, paid by OPM until 62 [2]. OPM computes it as if you were eligible for Social Security, using an estimate of your full-career benefit scaled by your FERS years [2]. So it uses Social Security's benefit formula but isn't paid from the Social Security trust funds. It also follows Social Security's earnings test: it's cut $1 for every $2 of earnings above the exempt amount, which is $24,480 in 2026 and $25,560 in 2027 [2][4]. The Trustees Report itself says nothing about the supplement. If Congress ever changed Social Security's benefit formula, whether that would carry over into the supplement would depend on the law it passed. We can't predict that.

Your Social Security check

Social Security is the piece of FERS retirement income most exposed to the trust fund outlook. A FERS employee who turns 62 in 2032 or later (born in 1970 or later) could start benefits around the projected OASI depletion date [1][3]. That's why it helps to know how much of your retirement income depends on Social Security:

• Illustration only: say your planned Social Security is $2,400 a month. If benefits were cut to 83% of scheduled amounts, the combined-fund payable rate at depletion, that would be about $1,992. That's a gap of roughly $408 a month [1]. The pension and TSP would be unaffected by that projection.
• Run your plan twice: once with full Social Security and once with the reduced figure. Our FERS Retirement Calculator makes that easy.

Claiming age still matters

Under current law, claiming at 62 permanently reduces your benefit by about 30% if your full retirement age is 67, and delaying past full retirement age raises it up to age 70 [3]. The trust fund outlook doesn't change those rules today. Some people decide to claim earlier because of the uncertainty. That's a personal choice, best tested with your own numbers.

Medicare

The Medicare Hospital Insurance fund is projected to pay full benefits until the second quarter of 2033, then 89% [1]. The 2026 Part B standard premium is $202.90 a month [1]. Many FERS retirees weigh Part B against their FEHB coverage, so those numbers are worth watching.

What to do now

1. Pull your Social Security estimate at ssa.gov/myaccount.
2. See how your four income streams fit together in What income can you use in retirement?
3. Plan the age-62 gap when the FERS supplement stops, and how TSP withdrawals could cover it.
4. Veterans: a military deposit adds FERS pension years. Social Security isn't affected by it. See FERS for Veterans.

Run the numbers → open the FERS Retirement Calculator

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Official sources

1. SSA: A Summary of the 2026 Annual Reports (Social Security and Medicare Boards of Trustees)
2. OPM: Types of Retirement (eligibility, MRA, FERS annuity supplement)
3. SSA: Starting your retirement benefits early (full retirement age and age-62 reduction)
4. SSA: Exempt amounts under the earnings test
5. OPM: FERS Computation

Checked against the official sources above on November 2, 2026. Education only, not legal, tax or financial advice. Not affiliated with OPM, SSA, the TSP or any government agency.