A recent report from the Social Security trustees has revealed that projections for the program’s shortfall has moved up by a year, meaning that if lawmakers do not intervene soon, the program will no longer be able to pay 100% of scheduled benefits as of 2034 which is less than a decade from now.
Dave Ramsey, a finance author and radio host also breaks down why the Social Security program requires change. Here is what you need to know.
Social Security projected shortfall
In a summary of the annual report for 2025, the trustees wrote, “As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues.”
The Old Age and Survivors Insurance (OASI) trust fund is a particular cause for concern as it is projected to run out by 2033 — a year earlier than what was projected in the 2024 report. In the event of this shortfall, the program will only have the capacity to pay 77% of the scheduled benefits. The Disability Insurance (DI) trust fund, on the other hand, is projected to continue to pay 100% of scheduled payments for the entire projection period of the report which ends in 2099.
Subsequently, if lawmakers do not make some sort of change immediately, beneficiaries are likely to see a cut to their benefits starting in 2034. Additionally, as a result of these projections, many seniors are opting to begin claiming benefits earlier due to fears that the program might run out of funding in the future.
A significant source of pressure on the OASI trust fund has been the recent influx of increased benefits as a result of the Social Security Fairness Act which was signed into law at the beginning of the year. This new law restored full benefits to some 3 million beneficiaries who had previously had their benefits reduced or eliminated under the provisions of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
The report further notes that if the OASI and DI trust funds were combined into one funding source for benefits, it would have the capacity to pay 100% of scheduled benefits up until 2034. Following this, the program’s fund reserves would be exhausted.
In a statement, AARP CEO Myechia Minter-Jordan, explains that, “the new projections “show the trust fund for Social Security is going to be depleted one year sooner than was projected last year, which means that Social Security recipients may see a 19% reduction in their Social Security income one year sooner.”
“Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives. More than 69 million Americans rely on Social Security today and as America’s population ages, the stability of this vital program only becomes more important,” Minter-Jordan added.
Dave Ramsey explains why the program needs to be adjusted
“As more and more boomers retire, the number of Americans 65 and older is expected to jump from roughly 61 million today to about 77 million in 2035,” Dave Ramsey explained to The Street. “At the same time, there will be fewer workers supporting more retirees, which puts even more of a strain on the system.”
Ramsey further stressed that “Americans should not view Social Security as a main source of income during retirement. Rather, it should be a small but helpful part of one’s retirement income that includes investments in tools such as 401(k) plans and IRAs.”
“Any money you get from Social Security should be considered icing on the cake,” he added.
This sort of financial pressure and funding concern is not exactly a new development for the program. As of 2021, costs have been higher than income and this gap has been a significant contributor to the depletion of trust fund reserves.
As such, in a message to the public, the trustees wrote the following:
“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”