Social Security Is Running Out? Here's the Truth

If you're in your 50s or 60s, you've likely heard the headlines: Social Security is running out of money. It's enough to make your stomach drop. After paying into the system for decades, the idea that those checks could shrink — or vanish — feels like a betrayal. But is the panic justified?

Let's unpack what's really happening — without the spin.

The Big Question: Will Social Security Disappear?

No. Social Security will not vanish, go bankrupt, or cease to exist.

What is at risk is whether the system can continue paying full benefits. According to the 2024 Social Security Trustees Report, the trust fund used to pay benefits is projected to become depleted in 2035 — a year later than previously expected due to a stronger economy and more people paying into the system.

In a statement reported by CNBC, Social Security Commissioner Martin O'Malley said, "This year's report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity — any potential benefit reduction event has been pushed off from 2034 to 2035."

If Congress does nothing after 2035, the program will still be able to pay 83% of scheduled benefits using the money collected from ongoing payroll taxes.

That's a serious shortfall — but it's not the same thing as insolvency.

Why This Is Happening

This isn't about reckless spending or a government conspiracy. It's math.

The root issue is demographics. Fewer workers are supporting more retirees. That's largely because the average number of children per woman in the U.S. dropped from three to two over the past several decades. As a result, there are fewer younger workers paying into the system while a larger generation of retirees is drawing benefits.

Social Security is funded by a 12.4% payroll tax — split evenly between employees and employers. That money goes directly to current beneficiaries. When there's a surplus, it's added to trust fund reserves. When there's a shortfall, the trust fund makes up the difference.

But once the trust fund runs dry, the program is limited to incoming payroll taxes — and that's where the 83% figure comes in.

So, What Can Be Done?

Congress has been here before. In 1983, with the system on the brink, bipartisan legislation saved Social Security by raising the retirement age and adding income taxes to some benefits.

In a statement reported by CNBC, AARP's senior vice president of government affairs Bill Sweeney said, "Congress has a responsibility to sit down and work this out in a bipartisan way. And the sooner they do it, the better."

Today, possible solutions include:

• Raising or eliminating the cap on taxable income (currently $168,600 in 2024).
• Increasing the payroll tax rate.
• Gradually raising the full retirement age.
• Modifying the benefit formula for higher earners.
• Any combination of these changes could restore solvency.

According to the Social Security Administration's Chief Actuary, fixing the gap could mean a 13% immediate benefit cut, a 2% payroll tax hike, or a blended solution — and doing it sooner gives everyone time to adjust.

Who's at Risk?

Nearly 70 million Americans receive Social Security benefits today. About 50% of retirees rely on Social Security for at least half of their income. For 20%, it's virtually their entire income.

If nothing is done and benefits are cut by 17% in 2035, those with no other sources of retirement income will be hit hardest. It's not just uncomfortable — it could push millions into poverty.

The Politics: Why It's Taking So Long

Fixing Social Security isn't technically difficult. But politically? It's a hot potato.

Some lawmakers favor raising taxes. Others want to trim benefits. So far, there's been no agreement — and each passing year narrows the window for gradual reform. But history suggests action will come, especially as we near the 2035 deadline.

In the meantime, retirees shouldn't panic — but they should plan.

What You Can Do Now

If you're nearing retirement:

• Keep contributing as long as you can.
• Delay claiming benefits if you're able — waiting until 70 increases your monthly check.
• Diversify your retirement income through savings, investments, or part-time work.
• And most importantly — stay informed. Social Security may face challenges, but it's not disappearing.

Final Thoughts

Social Security is a pillar of American retirement. It has weathered economic upheavals, wars, and political gridlock. It's not perfect — but it's not broken beyond repair. While adjustments are needed, the system remains one of the most successful social insurance programs in history.

Don't believe the doom-and-gloom. But don't ignore the signs, either. Congress has time — but not forever. And you? You've got the power to prepare.

References: Will Social Security run out? Here’s what could happen to your benefits | The Future Financial Status of the Social Security Program | Will Social Security Run Out Of Money? If So, When? | Social Security now expected to run short on funds in 2035, one year later than previously projected, Treasury says