The viability of Social Security has been an ongoing, if not quiet concern for years.
As those concerns get louder it can be nerve racking to hear, especially for those of us who have paid into it for many decades and are counting on it as an income source in retirement.
Let’s take a step back and see what is being reported, what the context is, and what future solutions are being proposed.
The 2025 Social Security Trustees Report warns that Social Security trust funds could be depleted by 2034.
Why is this happening? An aging population is claiming benefits, with fewer workers paying in through payroll taxes. It means the trust fund that covers the difference is being depleted faster.
This does not mean that Social Security retirement benefits would suddenly disappear if no action is taken.
Ongoing payroll taxes pay for most of the Social Security Benefits received.
If it is depleted, ongoing payroll taxes would still cover roughly 83% of scheduled benefits, but that figure could decline over time, potentially dropping to 73% by 2098.
In other words: In the worst-case scenario, it is estimated that Social Security will only be able to pay 70-80% of expected benefits from 2034 through the end of the century.
Since the disruption of benefits to current recipients is a political non-starter, there are many potential policy options being considered to improve Social Security’s long-term sustainability.
Among the changes to revenue and benefits being considered, alone or in combination:
1. An increase to the payroll tax on wages
2. A reduction of benefits for future recipients
3. Slowing the growth of benefits for some high earners
4. Raising the Full Retirement Age from 67 to 68
5. Linking the Cost of Living Adjustments (COLAs) to another index rather than the Consumer Price Index (CPI)
Congress is expected to act to prevent any major disruption or shortfall. The newly appointed SSA Commissioner Frank Bisignano has stated that this issue will be a top priority.
According to a 2023 Gallup poll, only 50% of non-retired adults expect to receive Social Security benefits in the future. This aligns with my own experience in conversations about retirement income planning. The reasons I encounter range from a misunderstanding of the situation to an abundance of caution.
Some of my clients want to plan for a retirement without Social Security benefits- and as a planner who always wants to prepare for the worst-case scenario as well as the best, I have always been happy to do this while providing assurance that Social Security is still expected to be there for us in some form.
Financial planning for retirement is crucial—not only to stay informed but also to navigate the uncertainties of the future.
By separating facts from fears, you can face retirement with confidence, knowing that while Social Security's future may be uncertain, proactive planning can help you prepare for the best outcome.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Western Wealth Management LLC , a registered investment advisor. Western Wealth Management LLC and Kennebec Wealth Management LLC are separate entities from LPL Financial.