Social Security is a personal and emotional topic, especially when you are worrying about retirement security or facing recent financial disruptions. It is completely natural to feel anxious. However, it is best to be grounded in facts and focus on what you can control.

While Social Security does face challenges, it is far from fading. In fact, the 2024 Social Security Trustees Report states that the Social Security trust funds, (which are still in surplus), are projected to continue through 2034 under the current plan. At that time, you could still anticipate receiving a reduced Social Security benefit.

Congress has known about the issue for decades and has acted before in 1983, when reforms extended the program’s solvency. To address the shortfall, they could raise payroll taxes, use general tax revenue, modify or delay early benefit rules or reduce benefits. If Congress were to solely reduce benefits to address the shortfall, 23% would be the lowest reduction, according to the Congressional Budget Office.

It is reassuring that there are many well-understood options for policymakers to address the shortfall. These include gradually raising the full retirement age, modestly increasing the amount of income subject to Social Security taxes, adjusting the payroll tax rate or tweaking how benefits are calculated. Each of these measures, or a combination of them, could help close the funding gap without dramatic disruptions for current retirees or those approaching retirement.

Congress has every incentive to act because Social Security is immensely popular across party lines. It is relied upon by more than 69 million Americans each month, and recognized by elected officials as politically untouchable.

It is reassuring to understand how much power individuals still have in planning
for the future. For example, if you want to be extra conservative, you could assume you will receive about 20%-25% less than your projected benefits when creating your financial plan. Planning this way might mean aiming for slightly higher savings goals. Knowing you have a buffer, if changes occur, can offer peace of mind. If no major benefit cuts happen, you will simply be better positioned financially.

The future may have its uncertainties but it is not out of our hands. With good planning, steady habits and a clear head, we can navigate these changes to reach retirement success.