Goodbye to Social Security: If you’re relying on Social Security to fund your retirement, the latest updates from the Social Security Board of Trustees should grab your attention. The 2025 report shows that the trust funds for Social Security are projected to run out by 2034. That’s less than a decade away, and it could significantly impact your retirement plans.
What Happens When Social Security Funds Run Out?
Once the trust funds are depleted, the Social Security Administration (SSA) will only have funds coming in from payroll taxes, which will cover about 78% of the promised benefits. This means retirees might not receive the full amount they expected. The main reason for this shortfall is America’s rapidly aging population.
By 2035, more than 78 million people in the U.S. will be 65 or older, compared to about 56 million today. Fewer workers are contributing to Social Security, while people are living longer, which puts a strain on the system. As a result, the growing number of retirees is outpacing the funds provided by fewer workers.
The Impact of a Shortfall on Your Retirement Savings
So, what does this projected shortfall mean in real terms? As of June 2025, the average monthly Social Security benefit is around $1,950, which equals about $23,400 per year. If you rely on Social Security for 20 years of retirement, that amounts to nearly $468,000. For a 30-year retirement, that number climbs to $702,000.
If Social Security benefits are reduced, you’ll need to make up the difference from your own savings. This could mean you’ll need anywhere from $468,000 to $702,000 more in your retirement savings to maintain the same standard of living. So, the big question is: are you on track to save that amount by the time you retire?
Why Early and Consistent Savings Are Crucial
For many Americans, the answer is likely no. Financial experts emphasize the importance of early and consistent savings, especially since Social Security might not cover all your expenses. One popular method for managing your finances is the 50/30/20 rule—spending 50% of your income on needs, 30% on wants, and saving 20%. If you’re not saving enough, you may want to adjust your budget and prioritize savings even more.
Some experts recommend cutting back on spending even further—spend 30% on needs, 20% on wants, and dedicate 50% toward savings and debt reduction. The goal is to get ahead of potential issues, rather than being caught off guard when you retire.
Diversifying Your Retirement Plans
The key takeaway is that relying solely on Social Security is no longer a reliable strategy for retirement. To ensure financial security, you should focus on building diversified income streams, like Individual Retirement Accounts (IRAs), 401(k)s, and long-term investments. These retirement accounts, along with personal savings, can make up for the gap if Social Security falls short.
While Social Security may not disappear entirely in 2035, it’s clear that changes are coming. Even if Congress doesn’t pass reforms to restore the program’s full solvency, payroll taxes will continue to provide some funding. But it’s important to be prepared for the possibility of reduced benefits.
The Need for Proactive Retirement Planning
Retirement planning has changed. It’s not enough to wait for Social Security to provide a majority of your retirement income. Proactive planning, including savings, investments, and budgeting, is essential to ensure that you can live comfortably when you retire, regardless of the future of Social Security.
By starting early and making smart financial decisions, you can secure a future where you aren’t reliant on a government check to fund your retirement. Diversifying your retirement strategy and saving consistently are the keys to long-term financial stability.
FAQ Section:
Q: What will happen when Social Security trust funds run out?
A: When the trust funds deplete by 2034, Social Security benefits will only be paid from payroll taxes, covering about 78% of promised benefits.
Q: How much will Social Security benefits be reduced in the future?
A: After 2034, Social Security benefits could be reduced by 22%, with only 78% of the expected payouts being available.
Q: What can I do to prepare for Social Security cuts?
A: It’s important to save and invest early, diversify your retirement accounts, and make adjustments to your spending to secure your financial future.
Q: How much do I need to save for retirement if Social Security isn’t enough?
A: If Social Security benefits are reduced, you may need to save an additional $468,000 to $702,000 in retirement accounts to maintain your standard of living.
Q: Will Social Security be completely gone in 2034?
A: No, Social Security will still exist, but it may only be able to pay 78% of the promised benefits due to insufficient funds. Reforms may be needed to restore full benefits.
If you kick people off.
We will homeless
There will be a lot of people.they work for retirement.
Totally agreed Denice
If I don’t get a check I’m very quickly dead, because of my depleting health, being homeless would be the same as a death sentence. Im only on basic Social Security $1206, but that at least helps me to pay for my very must have basic housing needs and nothing left over at all.
I only get 901 on ss. I would say every state in the US would go bankrupt if ss was wiped out. This is another of Trump’s doings did we not have enough of him the first time? What would do if he had to live on what most seniors live on.
I’d have to live in my car if ss is wiped out