Retirement Blog

Social Security Insolvency

May 25, 2023

Social Security Insolvency

The future of Social Security is changing for Americans. According to a recent report released by the Congressional Budget Office (CBO), the Social Security trust fund could run out of money by 2032 – one year sooner than was previously projected. This projection could still change, but it does put the insolvency date within the next 10 years. If you’re wondering how this will affect you, you’re not alone.

Social Security depends chiefly on a steady stream of payroll taxes from a growing workforce, but with the strain of the Baby Boomer generation fully entering retirement, rising life spans, and lower birth rates, the program’s trust fund is suffering. This means that the future beneficiaries are the ones expected to experience the reductions in payments once the reserves from previous years run out.

Upwards of 66 million people currently receive full Social Security benefits, with the average check coming in at around $1,691, according to January 2023 data from the Social Security Administration (SSA). If benefits were cut by 20%, payments would shrink to $1,352. With the projected cuts currently sitting at 24%, we can expect to see an even smaller sum once we hit the insolvency date.

No major legislation regarding Social Security has been passed since the early 1980s, and with this approaching deadline, Congress will be forced to do something about it, or these projected benefit cuts will become a reality for those in retirement.

At the end of the day, current workers will still receive their Social Security benefits after the reserves run out of funds in 2034, but it’s all too possible that future retirees will only receive 76% of their full benefits without any congressional action to prevent it.

There are so many questions and uncertainties surrounding the fate of Social Security.   Our advisors are available to meet with you to discuss the best ways you can take action to prevent entering your retirement with too little income. Feel free to reach out to our office to schedule a consultation.

We look forward to talking with you!

Sources: Social Security: 20% Cuts to Your Payments May Come Sooner Than Expected (
Five key questions about the dwindling Social Security trust fund | The Hill
Will Social Security Run Out? Here’s What You Need To Know (