Social Security isn't what it once was. The program used to be able to pay benefits for seniors, disabled workers, and their families without issue. But rising life expectancies and a greater number of retirees with fewer young workers to replace them has cast doubt on the future of the program.

This isn't a comforting thought to those who depend on their Social Security checks to pay their bills, but the news isn't as dire as you might think. Here's why you don't have to worry about Social Security disappearing in your lifetime.

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Social Security's trust funds aren't its only source of funding

When people say that Social Security is going to disappear by 2035, what they really mean is the program's trust funds are projected to be depleted by then, according to the latest Social Security Trustees Report. This is a serious problem, but the trust funds are just one of several sources of funding for the program.

In 2021, Social Security cost $1.144 trillion to operate, but it took in $1.088 trillion that year. Here's where it came from:

  • $980.6 billion from the Social Security taxes workers and self-employed individuals pay on their incomes.
  • $70.1 billion from interest on money in the trust funds that was invested in federally backed guaranteed securities.
  • $37.6 billion from taxing the Social Security benefits of certain retirees.

Once the trust funds are depleted, Social Security will still have two of the three income sources listed above, including the all-important Social Security tax that provides the bulk of the program's funding.

So Social Security will continue in some form beyond 2035. But we don't know what it will look like yet. Unless the government makes some changes to the program before its trust funds are depleted, we can expect benefit cuts. The latest estimates say Social Security would be able to pay out 80% of scheduled benefits in 2035, and this would drop to 74% of scheduled benefits by 2096.

But this may not happen. While nothing's been decided yet, lawmakers have thrown out several ideas for how to keep Social Security sustainable for future generations, including:

  • Raising the cap on income subject to Social Security taxes.
  • Raising the full retirement age (FRA), which determines when workers are eligible for their full benefit based on their work history.
  • Raising the Social Security payroll tax rate.

The government could end up doing some, all, or none of these things to fix the problem. For now, all we can do is wait and see.

What does this mean for you?

You can save for all your retirement expenses on your own if you prefer not to rely upon Social Security, but you don't have to do this. The program will still be around in some form for decades, so you will get something out of it as long as you've worked enough to qualify. 

If you're worried about benefit cuts, plan for Social Security checks that are 20% to 25% smaller than what you believe you'll be entitled to based on the current system. You can create a my Social Security account to estimate your benefit at various starting ages. Once you know about how much you expect per month, multiply this by 75% or 80%, depending on how conservative you want to be, and use this as your monthly benefit estimate.

For example, if you believe you'll qualify for $2,000 per month at 67, but you're worried about benefit cuts, you can plan for $1,600 checks -- 80% of $2,000 -- instead in your retirement plan. Save the extra money on your own so that, whatever happens with Social Security, you'll be able to cover all your expenses.