Social Security benefits serve as a critical financial lifeline for millions of older Americans, with many retirees relying heavily on these payments to meet their daily needs.
A recent 2025 report from the Nationwide Retirement Institute reveals that 61% of U.S. adults receiving Social Security benefits said they couldn’t financially survive if they missed even half of a monthly payment. Among those expecting to receive benefits in the future, 54% shared the same concern.
However, many retirees may face an uncertain future as Social Security confronts financial challenges, potentially leading to benefit cuts by 2034. Here’s why this is a concern, and steps you can take to prepare.
Why Benefit Cuts Could Be Coming by 2034
The biggest challenge facing Social Security is the depletion of its two trust funds: the Old-Age and Survivors Insurance (OASI) fund and the Disability Insurance (DI) fund. These funds are currently being drawn from to cover the deficit between the benefits being paid out and the income being received from payroll taxes.
However, with baby boomers retiring in large numbers and fewer workers paying into the system, the trust funds are rapidly running out of money.
According to the Social Security Administration (SSA), these trust funds are expected to be depleted by 2034. If no changes are made before then, the SSA will only be able to pay out about 81% of scheduled benefits, meaning significant cuts could be on the way for beneficiaries.
What This Means for You
If the trust funds run dry by 2034, Social Security benefits could be reduced by up to 20%. This would mean lower payments for millions of retirees unless lawmakers come up with a solution to replenish the funds. Although no official resolution has been reached, there are several proposals currently being discussed:
Taxing higher wages: Some lawmakers have suggested increasing the income subject to Social Security taxes, especially for individuals making over $400,000 per year. Currently, only income up to $176,100 is taxed.
Raising the retirement age: Another option being discussed is increasing the full retirement age, which would delay benefits for new retirees and reduce overall payouts.
Reducing benefits for higher earners: Some proposals suggest reducing benefits for wealthier individuals in order to lower Social Security expenditures.
While no decisions have been finalized, any changes to the program could significantly impact your future benefits.
How to Prepare for Potential Cuts
Although the future of Social Security is uncertain, there are steps you can take now to better prepare for potential cuts or changes to the program:
- Delay Claiming Benefits: Delaying the start of your Social Security benefits can significantly increase the amount you’ll receive each month. According to 2024 data from the SSA, the average retiree receives $807 more per month by waiting until age 70 compared to claiming at age 62.
Even a delay of just one or two years can boost your monthly benefit by hundreds of dollars, helping to offset potential future cuts. - Consider a Side Job or Passive Income: If you’re already receiving Social Security benefits, taking on a part-time job or generating passive income can supplement your monthly payments. Extra income streams can help you reduce your reliance on Social Security and build your savings for retirement.
- Cut Your Expenses: You’ve likely already found ways to trim your day-to-day expenses, but it’s worth considering larger lifestyle changes to make your money last longer.
Moving to a more tax-friendly state, downsizing to a smaller home, or rethinking your spending habits can all help stretch your retirement funds further. - Stay Informed: Staying up to date on changes to Social Security and understanding how they might affect you can help you adjust your financial plan accordingly. If benefit cuts are inevitable, knowing about potential changes early on can give you time to adapt.
The $23,760 Social Security Bonus Most Retirees Overlook
Many retirees are unaware of some little-known Social Security strategies that can boost their retirement income. For example, optimizing your claiming strategy or taking advantage of spousal benefits can add significant amounts to your Social Security checks.
Don’t miss out on the opportunity to increase your benefits—exploring these strategies can help you make the most of your Social Security payments and enhance your financial security in retirement.
