Few people would disagree with the fact that Social Security has problems. Many recipients believe that their checks don't cover enough living expenses and that their buying power has declined over time.
But despite those valid concerns, the Social Security Administration (SSA) has gotten one thing right: It has never failed to make a payment in the 86 years the program has been paying monthly benefits.
Some people worry that this will change, given that Social Security is now less than a decade away from insolvency. While the news on that front definitely isn't good, it may not be as concerning as you've been imagining.
Image source: Getty Images.
What Social Security's impending insolvency actually means
When people hear that Social Security is running out of money, many jump to the conclusion that the program will end. But that's not true.
Social Security's trust funds are rapidly running out of money. When that happens, it will only have the revenue from payroll taxes and benefit taxes on seniors to cover future checks. These already fund the bulk of the program, but they're not enough to cover all its costs.
If the government does nothing, benefit cuts would happen. A recent Congressional Budget Office report says that benefits would decline by about 7% in 2032 and by an average of 28% between 2033 and 2036.
That's not as bad as losing your checks entirely, but it's definitely not great. A 28% loss would drop the $2,076 average monthly benefit as of February 2026 to about $1,495 per month. This would be a huge blow to seniors, especially those who rely heavily on their checks. But it's not guaranteed to happen.
Social Security is likely headed for some changes
This isn't the first time the SSA has been in danger of running out of money. The program was in a similar position in the 1980s, and the government modified it to allow it to continue payments to all eligible beneficiaries. It will likely do the same thing again.
The catch is that the changes the government would have to make to avoid benefit cuts will require raising taxes. But there's more than one way to do that.
It could raise the payroll tax on the first $184,500 of workers' income in 2026. Or it could raise or eliminate the ceiling on that tax to force the wealthy to pay more into the program each year. It could also raise benefit taxes on seniors.
We don't know yet what will happen. But we'll likely find out in the next few years as the 2032 deadline approaches. Once we know the government's solution, it will be time to revisit your retirement plans and make adjustments as needed.
