Social Security’s financial outlook has taken a sharp turn for the worse. It is now official that Social Security benefits will be cut by nearly 20% sooner than previously expected. Additionally, the program is projected to run out of its funds by 2034, a year earlier than previous projections. If this happens, the consequences could be severe for millions of Americans who rely on Social Security benefits.
According to the Social Security Board of Trustees’ 2025 report, if Congress fails to act in time and save the program, benefits will be cut by about 20% starting in 2034.
Why are Benefits Being Cut?
The earlier depletion date is due in part to higher program costs caused by the Social Security Fairness Act, which increases benefits for millions of former government workers who had been affected. The act, which took effect on January 5, repealed the WEP and GPO provisions that denied benefits to millions of former government workers.
Additionally, the increase in baby boomer retirements and an aging population are also contributing factors, as more people are collecting benefits while fewer are paying into the system, thus creating a burden.
“The trust fund is slated to be depleted partly due to the wave of baby boomer retirements and an aging U.S. population, which means its reserves are drawing down because spending is outpacing income,” the report explains.
Frank Bisignano, Commissioner of Social Security, emphasized the need for urgent action, stating:
“Congress, along with the Social Security Administration and others committed to eliminating waste, fraud and abuse, must work together to protect and strengthen the trust funds for the millions of Americans who rely on it now and in the future for a secure retirement or in the event of a disability.”
What Will Happen to Your Check?
Despite the uncertainty surrounding Social Security, the system will not disappear and it will continue collecting payroll taxes that will allow it pay up to 77% to 81% of scheduled benefits. This is still a painful reduction, as the average monthly benefit, currently at $1,976, will drop to about $1,600.
The report states clearly that beneficiaries would see a reduction of between 19% to 23% in their Social Security benefits.
That looming threat has advocacy groups sounding the alarm. Dr. Myechia Minter-Jordan, CEO of AARP, called on lawmakers to act fast.
“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,” he said.
Possible Solutions to the Problem
According to Nancy Altman, President of Social Security Works, the only two solutions to the problem are raising revenue and cutting benefits. She argues that lawmakers who fail to support the increase are automatically endorsing benefit reductions.
One proposal to raise revenue is to lift the income cup on earnings subject to the payroll tax. Currently, only income up to $176,100 is taxed.
Altman also adds that, according to public polling, many people support making the wealthy pay more into the system and they strongly oppose benefit cuts.
Some Republican lawmakers propose the raising of the full retirement age (FRA) to 70 a move that effectively cuts benefits by delaying eligibility. Max Richtman CEO of the National Committee to Preserve Social Security and Medicare, opposed the idea saying that current and future seniors should not be asked to bear the cost of improving the finances of the program considering that almost 50% of them rely entirely on Social Security benefits.
Soaring Claims Are Adding Pressure
Another factor piling more pressure on Social Security and accelerating the crisis is the increase in the number of benefit applications. If the first five months of 2025, 1.8 million people filed for Social Security benefits and this is a 17% increase over the same period in 2024. This surge in applications is fueled by worries about the program’s long-term solvency.
Medicare Also at Risk
The Medicare Board of Trustees also released a report warning that its trust fund could run short by 2033, at which point only 89% of its costs would be covered. Dr. Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services (CMS), issued a warning saying that the report indicates an urgent need for serious intervention, and sustainable reforms to secure the future of Medicare.
Conclusion
Social Security benefits will be cut by nearly 20% in 2034 unless Congress acts soon. For millions of retirees, disabled workers, and surviving family members this is a looming financial threat that demand immediate attention.