One of the most common concerns I hear from clients approaching retirement is:
“Will Social Security still be there for me?”
Some people are hesitant to include Social Security in their retirement plans because they have heard the program is “going broke.” Others worry that their benefits could be dramatically reduced or eliminated altogether.
Social Security does face a significant funding challenge, but the situation is not quite as dire as many headlines make it sound. Social Security is not expected to disappear, and “running out” does not mean the program will have no money available to pay benefits.
What does it mean when we hear that Social Security is “running out”?
Social Security is primarily funded through payroll taxes paid by workers and their employers. When the program collected more in taxes than it needed to pay benefits, the excess accumulated in trust fund reserves.
Those reserves are now being used because the program is paying out more than it collects. This is largely due to demographic changes, including the retirement of the baby boom generation, longer life expectancies, and fewer workers supporting each beneficiary.
According to the 2026 Social Security Trustees Report, the trust fund used for retirement and survivor benefits is projected to deplete its reserves in 2032. If the retirement and disability trust funds are viewed together, their combined reserves are projected to last until 2034.
That does not mean benefits would disappear in 2034.
Even if Congress made no changes, payroll taxes would continue to come into the system. The Social Security Administration estimates that this ongoing revenue would be sufficient to pay approximately 83% of scheduled benefits when the combined reserves are depleted.
That would still represent a meaningful reduction, but it is very different from Social Security going away entirely.
Why has Congress not fixed it yet?
It is not accurate to say that no solutions have been proposed. Many proposals have been studied by lawmakers, policy organizations, and the Social Security Administration.
The challenge is getting enough political support to enact one.
Any long-term solution will likely require collecting more revenue, slowing the growth of future benefits, or combining the two. Tax increases are unpopular, benefit changes are unpopular, and Social Security affects an enormous number of voters.
Because the most effective solutions involve tradeoffs, elected officials have historically had little incentive to act before the deadline becomes unavoidable. Unfortunately, waiting also makes the eventual changes more difficult. Acting sooner would allow adjustments to be smaller and phased in over a longer period.
What changes could Congress consider?
No one knows exactly what Congress will ultimately do, but several frequently discussed options could strengthen the program.
Gradually increase the payroll tax
The current Social Security payroll tax is 12.4%, generally divided equally between employees and employers.
One approach would be to increase the rate gradually. For example, an increase of 0.1 percentage point per year for 10 years would eventually bring the combined rate to 13.4%. For an employee and employer, that increase would generally be divided between them.
According to the Social Security Administration, this gradual increase could solve about one-quarter of Social Security’s projected long-term funding problem.
A larger increase could address more of the gap. Increasing the combined payroll tax from 12.4% to approximately 16.4% immediately would theoretically eliminate the projected 75-year shortfall, although an increase of that size would be difficult politically and economically.
Increase the amount of wages subject to Social Security tax
In 2026, workers pay Social Security tax on the first $184,500 of their earnings. Earnings above that amount are not subject to the Social Security portion of the payroll tax. The limit typically increases each year as average wages rise. Unlike Social Security, Medicare tax does not have an income limit.
For example, someone earning $184,500 and someone earning $500,000 will pay the same amount of Social Security tax in 2026.
Congress could increase the $184,500 limit or begin taxing earnings above a higher threshold, such as $300,000 or $400,000. Another option would be to remove the income limit entirely so that all earnings are subject to Social Security tax.
How much this would improve Social Security’s finances would depend partly on whether higher earners received larger future benefits in exchange for paying additional taxes. Under one Social Security Administration estimate, removing the income limit without providing additional benefit credit could solve approximately two-thirds of Social Security’s projected long-term funding problem. Providing additional benefits on those newly taxed earnings would reduce the amount of the funding problem addressed.
Gradually raise the full retirement age
The full retirement age is currently 67 for people born in 1960 or later. Congress could gradually increase it to 68 or beyond for younger workers.
Raising the full retirement age is effectively a reduction in future lifetime benefits because workers would need to wait longer to receive their full amount. For that reason, any change would likely be phased in slowly and may protect people already retired or close to retirement.
One Social Security Administration estimate found that gradually increasing the full retirement age to 68 would address roughly 12% of the program’s projected long-term shortfall. It would help, but it would not solve the problem by itself.
Adjust benefits for higher-income retirees
Congress could also change the benefit formula so that future benefits grow more slowly for higher-income workers while preserving current benefits for lower- and middle-income retirees.
Other possibilities include changing how cost-of-living adjustments are calculated or taxing more Social Security benefits for higher-income households. Each option would affect retirees differently and would need to be evaluated carefully.
Will one change be enough?
Probably not.
A comprehensive solution is more likely to include several smaller adjustments rather than one dramatic change. Congress could combine a gradual payroll tax increase, additional taxes on higher earnings, a later full retirement age for younger workers, and targeted benefit changes.
This approach could spread the burden across workers, employers, and future beneficiaries while protecting current retirees and those closest to retirement.
It is also important to recognize that some of the frequently discussed adjustments are meaningful, not insignificant. A modest change to an individual may help, but closing the entire national funding gap will require a substantial combination of changes.
What should someone approaching retirement do now?
If you are in your mid-50s or older, I do not believe the right response is to leave Social Security completely out of your retirement plan.
Social Security remains an essential source of retirement income, and eliminating benefits for people who have paid into the program for decades would be extraordinarily disruptive. Historically, major Social Security reforms have also given people time to adjust and have often protected those already receiving benefits or approaching retirement.
However, it is reasonable to plan conservatively.
Depending on your age, financial resources, and retirement timeline, we may model both your currently projected benefit and a reduced-benefit scenario. This helps us answer a more useful question:
If Social Security benefits were reduced, would your retirement plan still work?
For someone retiring well before the projected reserve depletion date, we might assume full scheduled benefits initially and stress-test a future reduction. For someone younger, we may use a more conservative assumption from the beginning.
The bottom line
Social Security has a funding problem that Congress will eventually need to address. But the program is not expected to disappear, and the depletion of its trust fund reserves does not mean benefits fall to zero.
There are several workable options available. The longer Congress waits, the more significant those changes may need to be. For retirees and those approaching retirement, the best approach is neither to ignore the problem nor assume the worst. Instead, Social Security should be incorporated into a retirement plan thoughtfully, with enough flexibility to account for possible changes.