Social Security is not just a government program but a financial backbone of the country. For millions of Americans who have spent their lives building a nation, it is the only source of income.
For those people who are planning on leaving the workforce in the next few years, it is important to understand that Social Security is not a fixed guarantee, and one should read the fine print first.
As times change, the number of people receiving Social Security will reportedly be less than the number of people claiming benefits, and there will be significant changes. The lawmakers and economists have time and again warned people of these changes.
Anyone who is looking to be dependent on Social Security must be aware of the three factors that could affect their retirement planning.
Possible Benefit Cuts
One of the biggest threats to the sustainability of social security is the lack of funding or funding shortfall. Many experts and economists have claimed that by 2034, the coffers of Social Security will be empty, and the beneficiaries can lose up to 24% of their checks.
The system relies heavily on payroll taxes of the current working population to pay the benefits to retirees. However, a large number of baby boomers continue to retire and the number of people contributing into Social Security is significantly less, so the chart has become unbalanced.
90 years of Social Security and the cracks are showing.
The trust fund runs out by 2034, and for most workers, the return is NEGATIVE. Imagine saving 12% of every paycheck only to receive $2K a month.
Time for personal retirement accounts! pic.twitter.com/KGTRC6rDsd
— Stephen Moore (@StephenMoore) August 19, 2025
This is a devastating scenario for millions of older people who rely on governmental schemes and social security benefits for their survival.
It is important to realise that the Congress has tools to prevent cuts. It can raise taxes on the ultra-rich or redirect the funding from departments that are already overfunded; however, since no policy change has been announced, there may be no viable solution on time.
The takeaway for today’s workers: don’t rely solely on Social Security. One should build one’s own savings cushion.
A Higher Full Retirement Age
Another significant aspect of Social Security is the FRA, or full retirement age. According to social security administration, it is the age when one can claim 100% of their social security benefits. If one plans to get earlier than their FRA, there will be a significant cut in the social security benefits.
Currently, the FRA is 67 for anyone born in 1960 or later. However, there are proposals in Washington suggesting raising the FRA to 68 or even 69.
If you are on Social Security or close to being eligible, you should realize that trump proposed cuts to SS+ Medicare while he was in office.
Project 2025 wants cuts and to raise the retirement age to 70Vote for #HarrisWalz2024 #DemVoice1 #ProudBlue #wtpGOTV24 #DemsUnited pic.twitter.com/hVYm0NNJS7
— Terri Loves America 🟧💙💔🟦 (@ProudAFAmerican) October 9, 2024
People are arguing that this would reduce the pressure by delaying the full benefits from kicking in for millions of people.
However, for workers, the impact could be harsh. To keep working up until 68 or 69 can be brutal and agonising for the body. If the FRA shifts higher, millions of people may be pushed into working longer than they planned or can. They could also be forced to accept smaller checks if they retire earlier.
That’s why experts recommend boosting retirement contributions now. This will make people less dependent on an FRA.
A New Formula for COLAs
Social Security provides an annual cost-of-living adjustment (COLA). It is to help benefits keep up with inflation. The current calculation method is tied to the Consumer Price Index for Urban Wage Earners (CPI-W) which doesn’t reflect the real costs seniors face. The biggest price tags are healthcare and housing.
Advocates have proposed shifting to a more senior-focused inflation index, as per many reports. These would result in a higher amount in COLA and would be more accurate.
However, there has been no step to make such changes. Therefore, even after COLA implementation, there is hardly any change in Social Security. Once again, personal savings and smart investing are essential to bridge the gap.
Social Security may have provided stability for generations, but its future is not stable or trustworthy. There is a constant threat of benefit cuts, a possible retirement age hike, and COLA formula adjustments. Therefore, today’s workers must make some other arrangements and have savings.
