Social Security has been struggling for a while now, with the most recent pre-pandemic estimates suggesting the trust funds would be depleted by 2035. Then COVID-19 hit, forcing millions out of work and putting even greater strain on the program. And the blows keep on coming.

The research group Brookings predicts that somewhere between 300,000 and 500,000 fewer children will be born in 2021 because of the pandemic. That might seem completely unrelated to Social Security, but in 20 to 30 years when we're down a half-million workers because of this baby bust, the true effect that the pandemic has had on Social Security will become painfully clear.

Pile of Social Security cards

Image source: Getty Images.

Why fewer births threaten Social Security

Social Security is primarily funded through payroll taxes. The Social Security tax rate is currently 12.4%, but for those who aren't self-employed, it's split evenly between employee and employer. This system works well when there are enough people paying into Social Security to fund all the benefits recipients are entitled to. But when there are fewer workers paying into Social Security, it becomes more difficult for the program to generate the revenue it needs to pay benefits. 

The birth rate has been trending downward over the last several decades. That has led to fewer workers replacing the older adults who are now retired and claiming Social Security benefits, and these latest predictions from Brookings suggest COVID-19 could make the problem a lot worse. 

Complicating this further is the fact that the population of adults 65 and older is expected to almost double from its 2012 level of 43.1 million to 83.7 million by 2050, according to the U.S. Census Bureau. More Social Security recipients and fewer workers make benefit cuts, possibly up to 24%, likely as the program is stretched to its limits.

The government could alter the program, possibly by raising the payroll tax or raising the full retirement age (FRA) to deter people from claiming benefits as early. These actions could help keep the program sustainable for future generations, but nothing's been decided yet, so it's up to you to plan for the worst. 

How to plan for a financially secure retirement

It's unlikely that Social Security is going to disappear altogether, but it probably won't go as far in the future as it does today. If you want to be extra sure you'll have enough savings, you could plan as if you won't receive Social Security benefits or will get a reduced benefit. Even if you are counting on Social Security to provide some income in retirement, you should still expect to save for the bulk of your expenses in a retirement plan.

You can estimate your benefit at different ages by creating a my Social Security account. If you'd like to be conservative, you could assume you'll get slightly less than that amount, and if a major benefit cut does come, you will still be on track.

Anything you do today to boost your income will give you more cash to put toward your future now. It may also help boost your Social Security benefits because they're based on your average monthly income during your working years, adjusted for inflation. Whatever you do, make sure you work for at least 35 years. If you don't, you'll have zero-income years factored into your benefit calculation, which will shrink your checks.

You should also think carefully about when you plan to begin claiming benefits. You can start at 62, but you must wait until your FRA (66 to 67, depending on your birth year) to get the full amount you're entitled to based on your work record. Every month you delay benefits increases your checks until you reach your maximum benefit at 70. This is 124% of your full benefit if your FRA is 67 or 132% if your FRA is 66. 

Delaying benefits isn't always the wiser move. It depends on how long you expect to live. But if you think you'll live a pretty long life, you will probably get more money overall by delaying benefits until your FRA or beyond. But this places a bigger burden on your personal savings early in retirement, and not everyone can afford that.

There aren't any easy answers to the problems facing Social Security or how to prepare for them when your retirement is decades away. Your solution will be unique to you, but some of the suggestions above could work.