The Social Security Board of Trustees has announced the program’s combined trust funds are projected to be able to help cover all scheduled benefits in full until 2034 — one year earlier than projected last year — at which point only 81% of benefits will be payable.
In 2024, Social Security cost $1.48 trillion while only bringing in $1.42 trillion — resulting in a $67 billion decline in funds
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Government action will be necessary to address the ongoing funding problem. But in the meantime, Americans must deal with the prospect of reduced Social Security checks in the near future.
So, what can people do to shore up their retirement savings?
How Social Security works
Social Security is largely a pay-as-you-go system, where current workers and their employers pay taxes that fund benefits, with the intention that when workers retire, the following generations will pay into the system to fund their benefits. There are also Social Security trust fund reserves earning interest that can contribute to benefits. Some beneficiaries may pay taxes on part of their benefits as well.
As the population ages, the amount in benefits being paid out is exceeding how much the program takes in. This has been the case since 2021. Approximately 70 million beneficiaries in 2024 drew funds from Social Security, outpacing the taxes and interest being collected.
Current action on Social Security
Shortly before President Joe Biden left office, he signed the Social Security Fairness Act into law. The act unlocked benefits for a number of public workers. Critics of the bipartisan legislation argued the expanded benefits would hasten the depletion of the Social Security trust funds.
In addition, policy proposals made by President Donald Trump during his election campaign came under scrutiny for potentially putting the funds at further risk. These include eliminating taxes on Social Security benefits, ending taxes on tips and overtime, implementing tariffs and mass deportations.
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Some of these measures were included in Trump’s One Big Beautiful Bill Act. A letter from the Social Security Administration’s (SSA) Office of the Chief Actuary estimated the bill would increase program costs and accelerate the depletion of the trust funds by several months.
As for the agency itself, early in the year, it was announced the SSA aimed to cut 12% of its staff — approximately 7,000 people — which critics argued would have a negative impact on services.
How you can better prepare for retirement
Social Security retirement benefits are meant to supplement your income, not replace it entirely.
Increasing your savings as much as you can is still the best way to grow your nest egg. Money placed in a tax-advantaged 401(k) or IRA account can be invested in the stock market. The farther away you are from retirement, the more time you have to take advantage of compounding. The more your portfolio grows, the less you’ll be forced to rely on Social Security.
If you’re closer to retirement age, you may want to switch to more conservative investments, like certificates of deposit, to shield yourself from economic downturns. Speaking with a financial advisor can help you create a blueprint for your golden years.
And it may not be a popular prospect, but the longer you remain in the workforce, the longer you can go without drawing Social Security or dipping into your savings. Plus, while you can start claiming Social Security benefits at age 62, if you wait until age 70 you can earn a bigger check each month.
Instead of waiting for an act of Congress, the best way to deal with the looming Social Security shortfall may be to bolster your finances yourself.
Editor’s note, Oct. 2, 2025: The first paragraph now clarifies that Social Security’s combined trust funds are projected to be able to help fund benefits in full until 2034.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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