Because a large portion of the American retiree population depends on Social Security checks to cover their monthly expenses, rumors about those benefits coming to an end naturally cause panic. However, it is important to understand how Social Security works. As structured, it would be difficult for benefits to be completely exhausted, although there could be significant cuts.
Since Social Security is funded through payroll taxes, the likelihood of it going bankrupt is extremely low. However, given the program’s ongoing financial challenges, beneficiaries could see reductions in their payments. This is concerning not only for retirees but also for those who are currently working and planning for a financially secure retirement based on Social Security benefits.
As reported by Fool.com, “Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund, which is what retirement benefits are paid out of, is set to run dry in 2033. At that point, only 77% of benefits will be payable, say the Trustees. Social Security’s Disability Insurance (DI) Trust Fund is in better shape and expected to be able to pay 100% of scheduled benefits through at least 2099. If the OASI and DI Trust Funds were to be combined, collectively, they’d run dry in 2034, after which 81% of benefits will be payable.”
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These figures may change in the coming years, but the overall outcome is likely to remain the same. Social Security cuts can only be prevented if lawmakers develop a better plan to sustain the program, ensuring that people who depend on it are not adversely affected.
However, it is best to prepare for potential cuts, and people who are still working are better positioned than those who have already retired. One of the primary steps working individuals can take to offset reduced benefits is to increase their IRA or 401(k) contributions.
Moreover, delaying claims until the maximum retirement age can also help maximize benefits. If a working person waits until full retirement age before claiming benefits, they will start with a higher baseline benefit, even if payments are later reduced.
Social Security report confirms drastic improvements
“The OIG’s audit confirmed the SSA’s enhancements, including wait times that now average seven minutes, down from 30 minutes in January.”https://t.co/qKLVbdVNWZ
— Social Security (@SocialSecurity) December 23, 2025
However, for retired people the ways of making up for reduced benefits are lesser but not non-existent. One way a retired person can deal with the reduced benefits is by trying to get some additional work to make some more money if their health and situation permit.
Seeking from a financial advisor to plan around the savings one has might also help to deal with the reduced benefits. Budgeting the monthly expenses in a more streamlined way also often helps with limiting the spending, leading to more savings.
Therefore, while benefits are not going bankrupt, the risk of reduced benefits remains, which is why both retired and working professionals should manage their finances better to ensure that they can stay afloat even with reduced benefits.
