This article is part of the Retirement Financial Life Equation (RFLE) series.
The headlines can be concerning: “Social Security Trust Fund to Be Depleted by 2033!” “Automatic Benefit Cuts Coming!” “Bankruptcy Looms for Nation’s Largest Program!” If you’re counting on Social Security—most are, whether you’re already collecting, planning to retire soon, or decades away—these warnings can cause a lot of anxiety.
I’ve touched on this subject before, but in this article, I’ll do a deep dive to address the question directly: Is Social Security going broke?
The short answer is: No, probably not; at least not in the way most people think. But yes, the program faces significant financial challenges that will require congressional action. The trust fund reserves are being depleted, but that doesn’t mean Social Security is disappearing or that everyone’s checks will suddenly stop.
As someone committed to both fiscal conservatism and wise stewardship, I want to give you my best fact-based, balanced assessment of where things stand, what’s likely to happen, and how you should plan accordingly.
What “depletion” actually means
First, let’s clarify what we’re really talking about. According to the 2025 Social Security Trustees Report, the combined Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds are projected to be depleted by 2034, one year earlier than last year’s projection. The retirement fund (OASI) alone is projected to be depleted in 2033.
But “depletion” is not the same as “bankruptcy” or “going broke.” Here’s what it means:
Depletion occurs when the trust fund reserves are exhausted. These reserves are the surplus that has accumulated over decades when Social Security collected more in taxes than it paid out in benefits. Once depleted, Social Security can only pay benefits from incoming payroll tax revenue.
Depletion does not mean that Social Security suddenly shuts down; benefits do not go to zero.
Here’s why: Even after reserve depletion, Social Security will still collect payroll taxes from current workers. According to the Trustees, those tax revenues will be sufficient to pay approximately 81% of scheduled benefits in 2034, declining to approximately 72% by 2099 if no changes are made.
So, if you’re currently receiving (or expect to receive) $2,000 per month and Congress takes no action, that amount would drop to approximately $1,620 per month in 2034. That’s a significant cut—about $380 per month or $4,560 per year—but it’s not zero.
For context, the average Social Security retirement benefit as of January 2025 is $1,976 per month. An 81% payment would be approximately $1,601, roughly the average benefit in 2018.
Why this is happening
Social Security’s financial challenges stem primarily from demographics, not fraud, waste, or mismanagement. Three factors are driving the shortfall:
1. Longer Life Expectancy When Social Security began in 1935, the average life expectancy was around 61 years. Today it’s about 77. People are living longer, which means they’re collecting benefits for more years. This is good news for individuals, but challenging for program finances.
2. Lower Birth Rates The U.S. fertility rate has fallen from 3.7 children per woman in the 1960s to about 1.6 today. Fewer children means fewer future workers paying into the system. The Trustees now project the fertility rate won’t recover to 1.9 until 2050, a decade later than previously assumed.
3. Changing Worker-to-Beneficiary Ratio In 1945, there were 42 workers paying Social Security taxes for every beneficiary. By 1960, the ratio of workers to beneficiaries was 5.1:1. Today, it’s about 2.8 workers per beneficiary, and it’s projected to fall to 2.3 by 2040. More beneficiaries relative to workers means the math doesn’t work as well.
These are structural and demographic realities, not problems caused by congressional malfeasance or by foreign aid (which, as I explained in my previous article, represents only about 1.2% of the federal budget).
The 2025 Trustees Report also cited the recently enacted Social Security Fairness Act as accelerating the depletion of the trust fund. This law, signed in January 2025, repealed provisions that reduced benefits for certain public-sector workers (like teachers and police officers) who also had pensions. While the law addressed legitimate fairness concerns, it increased costs without adding revenue, moving the depletion date up, and accounting for nearly half of the increasingly poor outlook.
We’ve been here before
If this all sounds dire, remember: Social Security has faced similar crises before, and Congress has acted. (I know, “Congress acted” is not a phrase we hear very often these days, but it sometimes does.)
In the early 1980s, Social Security was projected to run out of money as early as August 1983. The situation was urgent and politically contentious. Sound familiar?
President Reagan appointed a bipartisan commission, chaired by Alan Greenspan (later became Federal Reserve Chairman), to study the problem and recommend solutions. The commission included members from both parties, so neither side could blame the other for proposing tax increases or benefit cuts.
After contentious negotiations—including secret meetings of a “gang of nine” negotiators at the home of White House Chief of Staff James Baker—they reached a compromise. The resulting 1983 Social Security Amendments included:
- Accelerating already-scheduled payroll tax increases
- Gradually raising the full retirement age (from 65 to 67, phased in over decades)
- Making up to 50% of benefits taxable for higher earners
- Delaying cost-of-living adjustments by six months
- Bringing federal employees into the system
The package split the difference: roughly half from revenue increases, half from benefit restraint. It was signed into law by President Reagan with bipartisan majorities in both chambers.
That averted the immediate crisis. The trust fund moved from near depletion to solvency for decades. The 1983 reforms didn’t solve everything forever—no legislation can predict all future circumstances—but they bought time and demonstrated that bipartisan compromise is possible when the urgency is clear.
The key takeaway from this is that Social Security’s challenges are solvable with political will.
What Congress will likely do
So will Congress act this time? I believe they will, though probably not until the political pressure becomes very intense, likely sometime between now and 2032.
Why do I think that? Here are several reasons:
1. Social Security is very popular. Social Security has broad support across party lines. Approximately 69 million Americans receive benefits—that is, roughly one in five Americans —and they vote in large numbers. Politicians who threaten current benefits face enormous backlash. We saw this in 1981 when Reagan proposed deep cuts to early retirement benefits; public opposition was swift and overwhelming.
2. The consequences of doing nothing are unacceptable. Allowing automatic 19-23% benefit cuts would be politically catastrophic for whoever holds power at the time. For current retirees and those who depend on Social Security for the majority of their income (about 40% of beneficiaries), such cuts would cause genuine hardship. No Congress wants that on its record.
3. The solutions are known and feasible. Unlike some policy challenges, Social Security’s math is well understood. Numerous reform proposals exist that would restore solvency. The challenge is political will, not technical knowledge. When the deadline approaches, that political will tends to materialize, as it did in 1983.
4. Partial fixes buy time. Congress doesn’t need to solve the problem forever—just for the next 75 years (the standard projection window). Even modest adjustments can significantly extend solvency. For example, the Social Security Fairness Act, which worsened the outlook, demonstrates that Congress remains willing to modify the program. They can also modify it in the other direction.
What reform might look like
I’ve mentioned before that the American Enterprise Institute, bla bla bla
Based on my research, Andrew Biggs has developed a comprehensive Social Security reform plan that’s quite different from typical proposals. Here are his key recommendations:
Core restructuring
1. Universal Retirement Savings Accounts
- Automatic enrollment in employer-sponsored retirement accounts with workers contributing at least 1.5% of pay, matched dollar-for-dollar by employers
- Accounts would use low-cost index funds and life-cycle funds that automatically shift from stocks to bonds as retirement approaches
2. Flat Universal Benefit
- Replace Social Security’s complex progressive formula with a flat poverty-level benefit (about $920/month) paid to every American reaching retirement age, regardless of earnings history
- This would guarantee protection against poverty in old age
Work incentives (“carrots and sticks”)
The Stick:
- Gradually increase the early retirement age from 62 to 65 for workers retiring in the 2030s
The Carrots:
- Eliminate the 12.4% payroll tax for all workers aged 62 and older to encourage continued work
- Eliminate the Retirement Earnings Test that reduces benefits for early retirees who continue working
Additional reforms
Enhanced COLAs:
- Unlike most conservatives who want smaller COLAs, Biggs proposes COLAs that grow one percentage point faster than inflation, giving larger benefits to the oldest retirees when they need them most
Family-Friendly Tax Cut:
- Reduce the Social Security payroll tax by two percentage points for each child under 18 to offset the program’s negative effect on birth rates
Disability Insurance Reform:
- Experience-rate the employer’s share of disability taxes to reduce incentives for pushing workers onto disability rolls
Key philosophy
Biggs argues for increasing benefits for the lowest-income retirees while reducing benefits for middle- and high-income seniors, noting that a two-earner medium-wage couple retiring in 2024 receives over $59,000 annually in Social Security benefits before touching their own savings.
Notably, Biggs does not support privatization through personal accounts, distinguishing his approach from traditional conservative reform proposals. His plan focuses on protecting the most vulnerable while encouraging work, saving, and later retirement among those who can afford it.
While I can’t predict exactly what Congress will do, here are the most commonly discussed options. The final package will likely include a combination of these:
Revenue-side options (increasing income):
Raising the Payroll Tax Rate: Currently, employees and employers each pay 6.2% of wages (12.4% total). Even a modest increase—say, to 6.5% or 6.7% phased in over several years—would generate substantial revenue. Polls show Americans are generally willing to pay somewhat more to preserve Social Security, though large increases are politically difficult.
Raising or Eliminating the Wage Cap: In 2025, only the first $176,100 of earnings is subject to Social Security tax. Someone earning $200,000 pays the same dollar amount as someone earning $176,100. Raising this cap (or eliminating it entirely for high earners) is popular in polling—about 79% support this approach. However, this would require decisions about whether those higher earners receive proportionally higher benefits or if the relationship between contributions and benefits becomes more progressive.
Increasing Revenue from Benefit Taxation: Currently, up to 85% of benefits can be taxable for retirees with higher incomes, but the thresholds ($25,000 for singles, $32,000 for couples) haven’t changed since 1984. Adjusting these thresholds upward or using a more progressive formula could generate revenue while protecting lower-income beneficiaries.
Benefit-side options (slowing growth):
Gradually Raising the Full Retirement Age: The full retirement age is already scheduled to reach 67 for those born in 1960 or later. Congress could gradually raise it further—to 68 or 69—over many years. This effectively reduces lifetime benefits by requiring individuals to work longer before receiving full benefits. However, this disproportionately affects workers in physically demanding jobs and those with shorter life expectancies.
Adjusting the COLA Formula: Social Security benefits currently increase annually based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Congress could adopt the “chained CPI,” which grows slightly more slowly, or modify how COLAs are calculated for higher-income beneficiaries. Small changes compound over time.
Means-Testing or Progressive Benefit Adjustments: Some proposals would reduce benefits for wealthier retirees or slow benefit growth for higher earners while protecting lower-income recipients. This would make Social Security more of a safety-net program and less of a universal social insurance program—a significant philosophical shift that would face opposition from those who argue everyone should benefit from a program they paid into.
Adjusting the Benefit Formula: The formula that calculates benefits based on lifetime earnings could be modified to be more progressive, giving lower earners proportionally more and higher earners proportionally less than the current law.
What’s most likely?
Based on political realities and historical precedent, I expect Congress will:
- Act sometime between 2029 and 2033—close enough to the deadline to force action, but not so close that benefits are actually cut
- Implement a combination package—roughly splitting the adjustment between revenue increases and benefit modifications, as they did in 1983
- Protect current retirees and those near retirement—changes will be phased in gradually and primarily affect younger workers
- Raise the wage cap substantially or eliminate it for high earners—this is popular and generates significant revenue
- Make modest adjustments to FRA and COLAs—small changes that add up over time
- Grandfather current recipients—or at least those within 10 years of retirement
What won’t happen: Congress won’t let a 19-23% across-the-board benefit cut occur. The political costs are too high.
Age-based guidance
Your planning should depend largely on your age and how close you are to retirement:
If You’re Already Retired (65+)
Your Risk: Very Low
Political reality strongly suggests that current beneficiaries will be protected. The 1983 reforms largely exempted those already receiving benefits, and the same pattern is likely this time.
What You Should Do:
- Continue planning based on your current benefit amount
- Build margin in your budget if possible (even a small emergency fund helps)
- Stay informed but don’t panic or make drastic changes
- Consider delaying large purchases or drawing down savings more slowly until reforms are enacted
- Engage politically—contact your representatives to support responsible reforms
If You’re Near Retirement (55-64)
Your Risk: Low to Moderate
You’ll likely be largely protected, especially if you’re within 10 years of full retirement age. However, you might see modest adjustments to COLAs or benefit formulas if you’re on the younger end of this range.
What You Should Do:
- Continue your current retirement planning
- Consider delaying Social Security claiming if you’re financially able—waiting until 70 maximizes your lifetime benefit and provides better longevity insurance
- Build flexibility into your retirement plans—having other income sources (savings, pensions, part-time work) reduces your dependence on Social Security’s exact amount
- Don’t base major decisions (like early retirement) solely on current Social Security benefit estimates
- Review your benefit statement annually at SSA.gov
If You’re Mid-Career (40-54)
Your Risk: Moderate
You’ll likely see changes that affect your benefits, but they will be implemented gradually over your remaining working years. Expect adjustments to full retirement age, benefit formulas, or COLA calculations.
What You Should Do:
- Plan for Social Security to provide a smaller percentage of your retirement income than it might for current retirees
- Increase your retirement savings in 401(k)s, IRAs, and other accounts
- Assume you might need to work until 68-70 instead of 65-67
- Diversify your retirement income sources (don’t depend solely on Social Security)
- Factor potential benefit reductions of 10-20% into your long-term planning, but don’t assume zero
- Consider Social Security as one leg of a “three-legged stool” alongside personal savings and any pension/annuity income
If You’re a Young Worker (Under 40)
Your Risk: Higher, But Still Manageable
You’ll almost certainly see significant changes to Social Security, including later retirement ages, different benefit formulas, or means-testing. The program will still exist—demographic math still supports it—but it may look different than it does today.
What You Should Do:
- Don’t count on Social Security for the majority of your retirement income
- Maximize contributions to 401(k)s, 403(b)s, IRAs, and HSAs
- Start saving early—compound interest is your greatest advantage
- Assume you’ll work until age 70 before collecting full benefits
- Plan for Social Security to replace 25-30% of your pre-retirement income rather than the current 40%
- Develop skills and maintain health that allow working longer if needed
- Don’t completely dismiss Social Security—it won’t disappear, just evolve
What you can control
Regardless of your age, here are actions you can take that don’t depend on what Congress does:
1. Build multiple income streams – don’t rely solely on Social Security. Personal savings, employer retirement plans, rental income, part-time work, and other sources give you flexibility and security.
2. Manage your health – your ability to work longer if needed depends significantly on your health. Regular exercise, preventive care, and healthy habits pay dividends in retirement.
3. Delay claiming when possible – if you can afford to wait, claiming Social Security at 70 instead of 62 increases your monthly benefit by about 77%. This provides powerful longevity insurance and reduces your exposure to potential future benefit reductions.
4. Live below your means – the more you save now, the less dependent you’ll be on Social Security later. Even modest increases in your savings rate compound dramatically over time.
5. Stay informed and engaged – follow reputable sources on Social Security (like SSA.gov, Congressional Research Service reports, and nonpartisan policy organizations). Contact your representatives to advocate for responsible, balanced reforms. Avoid getting your information from viral social media posts with questionable math.
6. Be Flexible – having a retirement plan is important, but so is the willingness to adjust it. Whether that means working a few more years, reducing expenses, or relocating to a lower-cost area, flexibility is a valuable asset.
7. Seek professional advice – if you’re within 5-10 years of retirement, consider consulting a fee-only financial planner who can help you optimize your claiming strategy and coordinate Social Security with your other income sources.
Biblical wisdom for uncertain times
As Christians, how should we think about Social Security’s uncertain future? Several biblical principles apply:
Plan Wisely, But Don’t Worry Excessively
Jesus taught, “Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own” (Matthew 6:34). This doesn’t mean failing to plan—Proverbs repeatedly commends the prudent person who prepares for the future. But it does mean trusting God rather than being consumed by anxiety.
We should steward our resources wisely—saving, planning, and staying informed—without letting fear dominate our thoughts. Social Security’s challenges are real, but they’re also solvable, and our ultimate security isn’t in any government program.
Work Is a Gift
Our culture often treats retirement as the goal and work as the burden to escape. But Scripture presents work as part of God’s good design for human flourishing. “Whatever you do, work at it with all your heart, as working for the Lord” (Colossians 3:23).
If Social Security reforms mean working a few extra years, that’s not necessarily a tragedy. Many people find purpose, community, and satisfaction in continued work—especially if it’s on their own terms. Planning to work longer can actually enhance retirement security and life satisfaction.
Care for Future Generations
As we advocate for Social Security reforms, we should consider interests beyond our own. “A good person leaves an inheritance for their children’s children” (Proverbs 13:22). Kicking the can down the road and forcing harsher adjustments on younger generations isn’t faithful stewardship.
Reforms that balance fairness between generations—protecting vulnerable seniors while asking working-age people to contribute more or receive proportionally less—reflect biblical principles of justice and generational responsibility.
Hope Ultimately Rests in God
“For I know the plans I have for you, declares the LORD, plans for welfare and not for evil, to give you a future and a hope” (Jeremiah 29:11). Our deepest security isn’t in trust fund balances or benefit formulas—it’s in God’s faithfulness.
This doesn’t mean being irresponsible with our planning, but it does mean maintaining perspective. If Social Security benefits prove to be less than we hoped, we can trust that God will provide for our needs, whether through our own work, family support, church community, or unexpected provision.
The bottom line
So, is Social Security going broke?
Not in the sense of disappearing or going to zero. Even without congressional action, the program can pay approximately 81% of scheduled benefits after 2034 using ongoing tax revenue.
However, it faces a serious financial challenge that will require adjustments to revenue, benefits, or both. The trust fund reserves that have cushioned the program for decades will be depleted.
Congress will almost certainly act before automatic cuts occur. The political consequences of inaction are too severe, and the solutions are well understood. We’ve been here before, and Congress found a bipartisan path forward.
The reforms will likely include a mix of approaches—raising revenue through higher payroll taxes or increased wage caps, combined with modest benefit adjustments phased in gradually and targeted at younger workers. Current retirees and those near retirement will be largely protected.
Your response should be proportional to your situation. If you’re already retired or close to it, continue planning based on current benefits while building some margin where possible. If you’re mid-career or younger, diversify your retirement income sources, increase your savings, and assume you might work a few years longer than you originally planned.
Above all, don’t panic, but don’t ignore the issue either. Informed stewardship means understanding the challenges, planning prudently, staying engaged politically, and ultimately trusting that both human ingenuity and God’s faithfulness will see us through.
Social Security has been a blessing to millions of Americans for 90 years. With responsible reforms and faithful stewardship—by policymakers and individuals alike—it can continue to serve its purpose as part of our nation’s retirement security framework for generations to come.