Lately, all eyes have been on the 2025 Social Security cost-of-living adjustment (COLA) and the effect it will have on benefits next year. Checks will go up beginning in January, though we won’t know by how much until the COLA announcement on Oct. 10.

The increase will give retirees a little relief in the near term. But for those who expect to claim benefits for another decade or more, larger checks could be cause for concern, especially in light of new data on Social Security’s future.

Social Security is a decade away from insolvency

Social Security has been spending more money than it has taken in every year since 2021, and this trend is expected to continue. So far, it has kept itself going because its trust funds have had excess cash to make up the shortfall, but that money won’t last forever.

The Old Age and Survivors Insurance (OASI) trust fund, which pays for retirement and survivors benefits, is expected to be depleted in 2033, according to a Congressional Budget Office (CBO) report (opens PDF) from September. The Disability Insurance trust fund will be depleted in 2064.

And if the government combines the money in the two trust funds, it would be exhausted in 2034. This is because the Social Security Administration pays out significantly more in retirement and survivors benefits than it does in disability benefits.

If the government did nothing, beneficiaries would face a 23% cut to their checks beginning in 2035. This would gradually increase by another 5% by 2098. Benefits are expected to remain stable thereafter.

This would be devastating to millions of retirees, particularly those without adequate personal savings or another steady source of income. To give you some context, a 23% benefit cut would slash the $1,920 average retirement benefit (as of August) to $1,478 per month. That would amount to approximately $5,300 less per year in benefits.

A fix is possible but painful

The good news is the government isn’t likely to let such a benefit cut happen. This isn’t the first time Social Security has faced a funding crisis. When the program last confronted this issue in the 1980s, the government stepped in and made changes that allowed the program to largely maintain existing benefits.

However, the fixes had their drawbacks. Some of the key changes involved:

• Raising the full retirement age (FRA): This is the age at which you become eligible for your full benefit based on your work history. Claiming early is possible, but it reduces your checks. A higher FRA means younger claimants face steeper penalties for starting benefits at the same age as their older counterparts.
• Increasing the Social Security payroll tax: This is the tax all workers pay on their income up to an inflation-adjusted ceiling ($168,600 in 2024). This meant workers took home less money each year. Currently, this tax is 12.4%, split evenly between employer and employee.
• Introducing taxes on some Social Security benefits: This is a tax that certain retirees pay if their provisional income — the sum of their adjusted gross income (AGI), nontaxable interest on their investments, and half their annual Social Security benefit — exceeds $25,000 for single adults or $32,000 for a married couple. These taxes leave some retirees with less money to put toward their expenses.

These fixes are some of the same options government officials and experts have thrown around this time as well. So far, there’s no clear solution. The CBO report says it would take a 4.3% payroll tax increase to resolve the shortfall or a 24% permanent benefit cut. But given the major financial implications each of these options would have, it’s likely to be some combination of strategies.

There might be a smaller payroll tax increase along with increases to the Social Security benefit taxes that retirees pay. This would at least spread the burden of the program’s increased funding needs around rather than targeting one particular group.

For now, all you can do is wait to see how the government handles the funding crisis and learn how to diversify your retirement income sources. The less dependent you are on Social Security, the easier time you’ll have weathering whatever comes your way.

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