Millions of retirees could soon see smaller Social Security checks. A new government report warns the program’s trust fund may run out by 2033. If that happens, benefits would be cut by about 20%.
For the average retiree receiving $2,000 a month, that’s a loss of $400.
Why is this happening?
The cuts are tied to long-standing funding issues. Payroll taxes support current benefits. But with fewer workers and more retirees, the math no longer adds up.
Baby Boomers are retiring in large numbers. At the same time, people are living longer. That means benefits are being paid out for more years than expected.
The Social Security Board of Trustees says that without changes, the program’s main trust fund will be depleted by 2033. After that, only current payroll taxes would be available. That would cover just 77% of promised benefits.
What’s at stake for retirees?
If cuts happen, seniors will feel it right away. The reductions would hit all recipients. But low-income seniors and people with disabilities would suffer most.
A survey from The Senior Citizens League found nearly 66% of retirees already say their benefits don’t keep up with inflation. A 20% cut would make things worse. Many could fall into poverty.
There’s also concern that cuts would increase pressure on other safety-net programs like SNAP and Medicaid.
Are these cuts guaranteed?
Not yet. But time is running out. Congress has several options to fix the problem, including:
- Raising or removing the payroll tax cap
- Increasing the full retirement age
- Changing benefit formulas
- Creating new revenue streams
Both parties agree the issue is serious. But they don’t agree on how to solve it. With an election coming, Social Security reform could become a major issue in 2026.
What should retirees do now?
Experts say it’s important to stay informed but not panic. Most expect Congress to act before the worst happens.
In the meantime, financial advisors recommend:
- Reviewing other retirement income
- Delaying benefits if possible
- Getting advice on how to plan ahead
Social Security remains a lifeline for millions. But unless leaders act soon, the future of the program could change dramatically.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.