When 2025 began, the average monthly Social Security check for retired workers was $1,975.34. Though this might not sound like a lot, more retirees than you might realize count on their Social Security income as their financial foundation.
In each of the previous 23 years, national pollster Gallup has surveyed retirees to determine how important Social Security income is to their financial well-being. In every poll, 80% to 90% of respondents noted it was necessary, in some capacity, to help cover their expenses.
Although supporting and strengthening America's leading retirement program should be a priority for our elected officials, the financial health of Social Security has been deteriorating for four decades. Reforms need to be enacted to improve the program's financial health -- and that may include President Donald Trump breaking his campaign promise and proposing cuts to Social Security.
President Donald Trump delivering remarks. Image source: Official White House Photo by Shealah Craighead, courtesy of the National Archives.
Social Security is potentially eight years away from sweeping benefit cuts
Before digging into the details of what may come to pass, it's important to understand why Social Security's financial foundation is crumbling.
Ever since the first Social Security check was mailed in 1940, the Social Security Board of Trustees has issued an annual report outlining the financial health of the program. It details where every dollar in income comes from, as well as traces where those dollars end up.
What's even more intriguing are the long-term (75-year) forecasts provided by the Trustees concerning the solvency of Social Security's trust funds. Though the program is incapable of going bankrupt or becoming insolvent with the way it's current set up, the existing payout schedule, inclusive of cost-of-living adjustments (COLAs), may not be sustainable.
Every year since 1985, the Trustees Report has cautioned of a long-term funding obligation shortfall. In simple terms, estimated outlays (benefits and, to a lesser extent, administrative expenses to operate Social Security) would outpace collected income in the 75 years following the release of a report. The 2024 Trustees Report pegged this long-term shortfall at a staggering $23.2 trillion.
The more immediate concern is the forecast depletion of the Old-Age and Survivor Insurance Trust Fund's (OASI) asset reserves by 2033. If this excess cash built up since inception were to be exhausted, sweeping benefit cuts of up to 21% would await retired workers and survivor beneficiaries.
The culprit behind this financial maelstrom for Social Security is a confluence of ongoing demographic changes, such as rising income inequality, a historically low U.S. birth rate, and a steep decline in the legal net migration rate since 1998.
The OASI's asset reserves are pace to be exhausted by 2033. US Old-Age and Survivors Insurance Trust Fund Assets at End of Year data by YCharts.
President Trump will likely propose efficiency-based Social Security cuts
Lawmakers wanting to strengthen Social Security have three choices: increase income, reduce spending, or do some combination of the two. But given that any changes to Social Security would result in some group of people being worse off than they were before, it's typically an issue that lawmakers steer clear of.
Presidential candidates don't have the luxury of sweeping key issues under the rug. They're expected to offer concrete ideas as to how a clearly ailing program can be improved.
While on the campaign trail, then-candidate Donald Trump made clear that he wouldn't touch Social Security. By this, he meant that no changes would be made that result in sweeping benefit cuts, as some current and future retirees fear. This would mean increases to the full retirement age are off the table.
However, President Trump did leave the door wide open for efficiency-based Social Security cuts. In a December 2024 interview with Meet the Press, he responded to a question from TV journalist Kristen Welker by noting, "I said to people we're not touching Social Security, other than we make it more efficient. But the people are going to get what they're getting."
In each of Donald Trump's first four years in the White House, his presidential budget proposals called for a variety of efficiency-based cuts to Social Security. Based on projections, these actions would have reduced outlays by a cumulative:
- $72 billion from fiscal 2018 through fiscal 2027 (the fiscal year ends on Sept. 30).
- $64 billion from fiscal 2019 through fiscal 2028.
- $26 billion from fiscal 2020 through fiscal 2029.
- $24 billion from fiscal 2021 through fiscal 2030.
For example, President Trump's last budget proposal aimed to make the Disability Insurance Trust Fund more efficient by halving the retroactive benefits that workers with disabilities could receive from 12 months to six months. This would have accounted for more than half of the forecast $24 billion in 10-year cost-savings.
Though Donald Trump won't propose sweeping Social Security benefit cuts, all signs point to him breaking his promise to "not touch Social Security" by proposing efficiency-based cuts.
Image source: Getty Images.
The hard truth: Efficiency-based reductions won't cut it
While the Trump administration's efforts to cut down on government waste and make select programs more efficient are helpful in some respects, the president's budget proposals pertaining to Social Security during his first term in the White House would have hardly made a dent in the program's widening cash shortfall.
The hard truth is that strengthening Social Security will require bipartisan cooperation and some tough decision-making.
On social media message boards, commentors frequently call for the removal of the earnings tax cap as a means to shore up Social Security. In 2025, all earned income (wages and salary, but not investment income) between $0.01 and $176,100 is subject to a 12.4% payroll tax, which is the primary means of funding Social Security. Every dollar in wages and salary above this earnings tax cap is exempt from the payroll tax.
Based on a study conducted by the Social Security Administration's Office of the Actuary, completely removing the payroll tax ceiling and exposing all earned income to this tax would extend the solvency of Social Security's trust funds by "about 35 years. While this would kick the can decades down the road, taxing all earned income, by itself, doesn't come close to resolving Social Security's long-term funding obligation shortfall.
The other common proposal is to gradually increase the full retirement age from 67 to perhaps 69 or 70. Doing so would require future generations of retirees to wait longer to receive 100% of their retired-worker benefit, or to accept a steeper permanent reduction to their monthly payout if collecting early. Regardless of which claiming age retired workers select, their lifetime income would be reduced.
Although this approach would effectively lower Social Security's outlays over numerous decades, it does nothing to address the expected exhaustion of the OASI's asset reserves in 2033.
As much as Democrats want to increase income by taxing the well-to-do and Republicans want to lower long-term outlays, these unilateral solutions would miss the mark. The only way the existing payout schedule, including COLAs, has any chance of being sustained over the long run is with bipartisan cooperation.
