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What will Social Security look like when you retire? Many Americans have lost hope that there will be much left to see. According to recurring Gallup polls regarding Social Security, 43% of those surveyed in 2024 said they worry about the Social Security system a great deal, while 24% said they worry about it a fair amount.
Among those not yet retired, 35% still counted on Social Security as their major retirement income source. So what will Social Security realistically look like in the future? Should workers be concerned? It’s difficult to tell, because legislative changes could help workers receive all of their benefit, while a lack of action reduces it for everyone.
Key Takeaways
- Social Security was not designed to provide enough income for a comfortable retirement, nor is it likely to do so in the future.
- Without a legislative fix, the Old-Age and Survivors Insurance (OASI) Trust Fund reserve is expected to be depleted by 2033.
- Restoring Social Security to long-term solvency may fall disproportionately on younger and higher-income workers.
- Start saving for retirement as early as possible by contributing to a 401(k) plan or an individual retirement account (IRA).
The Future of Social Security
Social Security may look drastically different in the next few decades, especially since the Social Security Administration’s 2024 Trustees Report estimates that the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out Social Security benefits, will be depleted by 2035. At that point, the system will have no cash reserves, and projected receipts will receive 79% of their scheduled benefits.
Social Security’s surplus of more than $2.347 trillion at the end of 2024 ($2.7215 trillion in reserve – $374.4 billion in costs) was the result of decades of contributions from the huge Baby Boomer generation. However, that surplus was a decrease in reserves of $38.7 billion from the previous quarter—there has been a negative change in net asset reserves since the first quarter of 2021. As the boomers retire, they are causing benefit outlays to swell, while leaving fewer payroll tax contributors to support each beneficiary.
The Old-Age and Survivors Insurance (OASI) Trust Fund holds government securities issued by the U.S. Treasury, representing money owed to the trust fund from the General Fund. Think of it as the Treasury issuing an IOU to Social Security. The Treasury must have enough funds to pay the value of the securities, plus interest. If there are not enough taxpayers or taxes collected and allocated toward current Social Security obligations, there will be a deficit.
Changes must be made. Many have been proposed, and the Social Security Administration regularly releases estimates of the effect of the various legislative proposals on the balances of the Social Security trust funds.
Polling shows the majority of Americans favor eliminating the income cap on Social Security taxes and means-testing benefits.
What Social Security looks like after 2033 will be determined by Congress rather than opinion polls. In the past, lawmakers have opted to increase payroll tax rates and, much less frequently, to raise the age of eligibility for benefits, to ensure the program’s solvency.
The eligibility age for full benefits was increased from 65 to 67 for those born in 1960 or later under program changes passed by Congress in 1983. Meanwhile, the Social Security tax rate increased from its original 1% to 6.2% in 1990.
Who Will Be Affected Most?
Social Security benefits attempt to keep 16.3 million Americans 65 and older out of poverty. The reduction in benefits that would be required to balance outlays with receipts in the year Social Security is depleted would hit those just above the poverty line hardest, as well as those already living in poverty.
The Social Security Administration projects the poverty rate for beneficiaries age 60 and older would leap from 4.8% in 2033 to 8.1% in 2034 as a result of such a cut to benefits. (This data is from 2023 with a later estimate of Social Security being depleted). Of course, all future beneficiaries would face the cuts, while younger and higher-income workers in particular could end up paying higher taxes as part of a solution.
Social Security Is Not Enough for Retirement
Even if Social Security gets a huge makeover from Congress, workers should not consider the program a primary retirement plan. Even now, Social Security barely covers living expenses for recipients.
According to the Social Security Administration, benefit payments to 58.6 million recipients totaled $1.23 trillion in 2023. This might seem like a lot, but break down those numbers: in 2024, retirees received $1,975 per month, on average, and disabled workers $1,581 per month. Keep in mind what the poverty line is, which is roughly $1,304 a month for a single person and $1,763 for a couple in 2025.
If you are planning to retire in the next decade, it is important to use the time you have left wisely. Boost your retirement savings as much as possible while paying down debt and keeping spending low. Social Security payments alone will not cover a typical mortgage or living expenses when you are saddled with debt.
Secure Retirement, Your Way
So what can someone do when retirement is 20, 30, or even 40 years away? The best plan is to start saving now. Take advantage of the time you have and save as much as you can in your 401(k) or individual retirement accounts (IRAs); traditional or Roth.
The typical 401(k) plan automatically deducts your pre-tax contribution from gross earnings in each paycheck, reducing taxable income for the year. 401(k) plans also defer taxes on the accumulated gains until the money is withdrawn.
Be sure to contribute enough to get your employer’s full match, even if it is a small percentage. Otherwise, you’re passing up free money. Even if your company does not match contributions, 401(k) plans are a good deal. You get a tax break on the contribution, your funds grow on a tax-deferred basis, and you’ll be able to deposit much more than you can in an IRA.
IRA Contribution Limits
The maximum amount that you can contribute annually to any combination of traditional IRAs and Roth IRAs was $7,000 in 2024 and is $7,500 in 2025. Those aged 50 and older can contribute an additional $1,000 as a catch-up contribution in 2024 and 2025.
401(k) Accounts
The maximum 401(k) individual contribution was $23,000 for 2024 and is $23,500 in 2025. Those 50 or older can contribute an additional $7,500 for 2024 and 2025. The limit for defined contribution plans increased from $69,000 in 2024 to $70,000 in 2025, plus the additional contribution for ages 50 and above.
Roth IRA Income Limits
Contributions to Roth IRAs are limited and can be phased out, depending on how much income you earn and your tax filing status. The income phase-out range in 2025 is:
- $150,000 ($146,000 in 2024) and $165,000 ($161,000 in 2024) for single filers
- $236,000 ($230,000 in 2024) and $246,000 ($240,000) for married couples filing jointly
This means if a married couple earns more than $246,000 in 2025 and files jointly, they can’t contribute to a Roth account.
Start Early
As early as your 20s, you should make every effort to start saving for retirement—even if you feel you can’t afford it or you’re not in your dream job. If possible, have retirement savings deducted automatically from your paycheck. This way, you won’t miss the money.
Another strategy is to learn to live off of 98% of your paycheck and invest the other 2%, then gradually increase the percentage while cutting back on spending.
Will Social Security Still Exist In 2050?
There are no plans for Social Security to end. Current estimates from the Social Security Administration’s 2024 Trustee Report state that the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out Social Security benefits, will be able to pay out 100% of benefits up until 2033, after which it will only be able to pay out 79%.
What Would Happen if Social Security Runs Out?
If Social Security disappeared without any replacement, it would be economically devastating. Millions of Americans rely on Social Security to support their cost of living in retirement, with millions relying on it as their sole source of income. If Social Security were to disappear, it would result in a severe poverty crisis among the elderly with far-reaching consequences throughout the economy.
What Will They Replace Social Security With?
There have been many proposals over the years for a replacement, but there is no way to tell if the program will be replaced.
The Bottom Line
Many people worry whether Social Security will be available when they retire. Although it’s unlikely that Congress will leave the system relying solely on incoming receipts to pay reduced benefits, the solutions could include cost-saving measures such as delaying the age of benefit eligibility or means tests. If possible, everyone should be working to build their own retirement savings and not plan to rely on Social Security benefits as the primary source of retirement income.
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