If you're worried about the future of Social Security, you have reason to be: It's facing some big challenges, and if nothing is done to shore up the vital program, future beneficiaries will likely receive only a percentage of the retirement income they should receive.

Here's a look at why Social Security's future is troubled and reasons you can still hold out some hope.

Someone is leaning into his laptop, looking very worried about what he's seeing on it.

Image source: Getty Images.

What's the problem?

When Social Security was created in the 1930s, it probably seemed it would remain healthy forever. After all, the ratio of covered workers (those paying taxes into the program) to beneficiaries (those collecting benefit checks) was a hefty 41.9. It has been much lower than that over some 50 years, though, as the following table makes clear:


Ratio of Covered Workers to Beneficiaries

















Source: Social Security Administration.

While Social Security used to take in much more than it had to pay out, that surplus is now being depleted because of two key factors: people are living longer and retiring earlier.

The Social Security Board of Trustees issues an annual report on the state of Social Security. Its latest one was released recently, noting that the Old-Age and Survivors Insurance Trust Fund is now "projected to become depleted in 2033, one year sooner than last year's estimate."

That might make you think we have only a decade until Social Security will have to stop paying beneficiaries, but the news isn't that bad. Come 2033, Social Security will still be collecting income from taxes on workers' paychecks -- that sum just won't be enough for the program to fulfill its obligations entirely.

It's estimated that at that point, beneficiaries will collect about 77% of what they're due. Receiving 77% of what you're entitled to (based on taxes you've paid into the program throughout your entire working life) is definitely bad and undesirable, but 77% is still far better than 0%.

Should you despair?

That kind of news deserves some worry, but not necessarily despair -- because there's a decent chance that it won't come to pass. Since the program is so vital to so many -- representing about 30% of elderly Americans' income and, for over 10% of them, more than 90% of retirement income -- there's a lot of incentive for those in Congress to make some constructive changes.

Lots of possible changes have been floated, some more appealing than others. For example, some have proposed raising the full retirement age to 70 (from today's 66 to 67, depending on when one was born). Millions of workers probably won't be keen to wait three extra years to receive their full benefits -- especially if they need to retire early, perhaps due to health issues.

Another proposal is to tax workers on all their earnings. Right now, only earnings up to $160,200 are taxed, so someone earning $160,200 and someone earning, say, $53,160,200 will pay the same in Social Security taxes. (That earnings cap is adjusted yearly; last year, it was $147,000.)

A modest increase to the tax rate we pay for Social Security could also help to make Social Security whole. Combining a few of these fixes could make the program stronger than ever, perhaps so much so that it could pay bigger benefits.

So don't despair about Social Security's future but do pay attention to what's going on with it from year to year. And if you have some strong opinions on the matter, let your representatives in Washington know that you'd like them to take some action.