Social Security’s Trust Funds May Now Be Empty in Less Than a Decade. Here’s What That Means for You

Investing

Published: June 20, 2025 10:06 am

It was the news nobody wanted to hear.

The Social Security Trustees finally released their long-awaited annual report, which contained key information on the program’s financial situation. And there was one specific aspect of the report many people were eager to read about — the Social Security trust funds.

Think of the Social Security trust funds as the program’s savings account. Social Security can use that money as needed when it doesn’t collect enough revenue to keep up with its financial obligations.

That’s important, because in the coming years, Social Security is expected to lose out on critical payroll tax revenue as baby boomers retire in large numbers. Social Security can rely on its trust funds to keep up with its benefit payments until those funds are depleted. And there’s a not-so-wonderful update in that regard.

Social Security cuts could come sooner

Last year, the Social Security Trustees projected that the program’s combined trust funds could be out of money by 2035. In their most recent report, they moved that timeline up a year.

Now, the most current estimate is that the combined trust funds will be empty by 2034. That means benefit cuts are something retirees might face a year sooner, and within a decade. It also doesn’t bode well for current workers who are inching closer to retirement and are hoping to collect their monthly benefits without a reduction.

What exactly might benefit cuts look like?

Based on current estimates, if Social Security is forced to cut benefits in 2034, recipients should expect to receive 81% of their checks. Put another way, they’re looking at a 19% reduction, which is not insignificant.

Of course, these numbers could change, depending on how well or poorly Social Security does in the coming years. But all told, if benefit cuts happen, they could be large ones.

Prepare now for Social Security cuts

Seniors who are already reliant on Social Security for income may not have many options to prepare for benefit cuts. However, if you’re still working, you have an opportunity to prioritize retirement savings as long as you still have a paycheck coming in.

The more money you save for retirement on your own, the less dependent you’re apt to be on Social Security. And if you’re able to boost your nest egg, it could make up for whatever Social Security cuts come down the pike — assuming, of course, that they even do.

The reality is that lawmakers are unlikely to sit idly and watch Social Security reduce benefits on a broad level. There’s just too much at stake to not do a thing to stop that from happening.

But lawmakers may also have limited options for preventing Social Security cuts. So while they’re not set in stone, they’re something worth preparing for now if you’re still a member of the workforce.

If not, the best you may be able to do as a retiree is cut back on expenses to the greatest degree possible. You can also look at getting a part-time job to boost your income, even if it’s not how you imagined spending your senior years.