Social Security is facing a funding shortfall — and, therefore, retirees are facing a possible reduction in income. It may not happen because there are ways to bolster the program, but right now, it's headed for trouble.
That may be alarming, but it's probably not the biggest thing to worry about in your retirement.
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Social Security works by collecting taxes from workers and using the revenue to pay benefits to retirees. The system has worked so well for many decades that Social Security has long run a surplus.
But that surplus is running dry. With more people living longer and retiring earlier, Social Security is paying out more than it collects. Check out how the ratio of workers to Social Security beneficiaries has shrunk over time.
Data source: Social Security Administration. *projected, in the 2025 Social Security Trustees report
If nothing is done to strengthen it, the surplus in Social Security's trust funds will run out within a few years, resulting in benefits shrinking to around 78% of the amount due to beneficiaries.
So you might not get your full, earned benefits in retirement. You might only get around 78% of them — or less. If you're expecting $2,500 checks in your first year of collecting Social Security, you might end up with only $1,950.
Fortunately, there are multiple ways to save Social Security, should Congress decide to do so. But even if it doesn't, that 22% cut in your benefits should not be your biggest worry.
Instead, worry about whether you're on track to have saved enough for retirement by the time you retire. According to the 2026 Retirement Confidence Survey, millions have not.
Data source: 2026 Retirement Confidence Survey. *excluding the value of a primary home
Yes, you'll have Social Security, but even if benefits aren't reduced at all, typical benefits aren't that substantial. As of June, for example, the average monthly retirement benefit was just $2,084 — or about $25,000 annually.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
