If you’ve been seeing Social Security in the news more often lately, you’re not alone. The program has been under the spotlight, thanks in part to new changes brought on by the Department of Government Efficiency.
Plus, the Social Security Fairness Act has sparked serious debate, especially because it boosts payments for those who are impacted by the Windfall Elimination Provision and Government Pension Offset.
But alongside these headlines, a more ominous rumor has returned. The idea that Social Security is about to run out of money. It’s a fear that’s been circulating for years, and it’s easy to see why it’s catching people’s attention again. However, before you panic, it’s important to separate myth from reality.
Social Security Isn’t Going Bankrupt—But It Is Facing Pressure
A quick search of “Social Security” and “bankrupt” will flood your screen with alarming headlines. But don’t be so quick to believe them. As one key reminder, “Social Security gets most of its funding from payroll taxes.” That means as long as Americans are working and paying taxes, the system will continue.
“There’s absolutely no reason to assume that you won’t get any Social Security once you retire, even if you’re young or brand-new to the workforce.”
That’s the good news. The not-so-good news? Social Security is under financial strain, and in the next decade, it may hit a breaking point.
Why 2035 Matters—And Why You Should Care Now
Social Security won’t disappear , but the program’s trust funds , which serve as a backup to cover benefits when payroll tax revenue falls short, are in trouble. Baby boomers are retiring in massive numbers, and payroll tax revenue is expected to decline. Younger workers are entering the workforce, but not fast enough to keep the balance steady.
According to recent projections, Social Security’s trust funds could be depleted by 2035. Once that happens, benefit cuts could be on the table. And this isn’t a baseless fear, “that’s not a rumor — it’s something the Social Security Trustees have been talking about for years.”
So while the program can’t go completely broke, it can be forced to pay out smaller checks. That could impact your retirement in a big way.
What Should You Do Now?
If you’ve been bracing for Social Security to collapse entirely, this may come as a relief. But don’t get too comfortable. The smart move is to prepare as if benefit cuts are coming. Now’s the time to step up your savings game and look at extra ways to bring in income, especially with Social Security’s future up in the air.
To be fair, “Social Security cuts are not a given.” Lawmakers could take action before the trust funds dry up. But until that happens, it’s better to stay ready than be caught off guard.
One thing is for sure, “You don’t, however, have to stress out about Social Security going away completely, since that’s not in any way what’s happening.”
In a time of so much economic uncertainty, even being able to count on partial Social Security income can offer peace of mind, but only if you start planning today.
