Social Security has been in the news a lot this year. But it can be hard to understand exactly what is happening, especially when the changes come fast and furious. Whether you are already retired, approaching the golden years, or just starting to think about saving for that stage of your life, how could changes to Social Security impact you?
The Social Security Trust Funds
Approximately 85 cents per Social Security tax dollar is sent to the trust funds as of 2025. A small portion is reserved for funding the Social Security system, approximately one cent per dollar. And herein lies the dilemma. It’s anticipated these trust funds will run dry in the not-too-distant future, resulting in beneficiaries receiving reduced benefits.
The Social Security Administration cites 2035 as the final year that the funds combined will be able to pay 100% of scheduled benefits. It’s anticipated that benefits paid out will drop by 17% at that time.
“Benefits might be reduced if reforms aren’t made,” says Aaron Cirksena, founder and CEO of MDRN Capital, a full-service virtual firm. “It’s a funding imbalance: More retirees are collecting, fewer workers are paying in. The system wasn’t designed for today’s way of living. People are living much longer, the birth rate is down, and we’ve got waves of people retiring.”
Social Security in 2025
The SSA underwent some significant changes in 2025 to comply with President Donald Trump’s Social Security reforms. Its efforts are predominantly aimed at “enhancing customer service, reducing waste, fraud, and abuse, and optimizing its workforce towards direct public service.”
The SSA announced a plan in February 2025 to trim its staff down from 57,000 employees to 50,000. Rumors circulated for a while that the cut would be in the area of 50%, but the SSA has stated that that’s not the case. It also had not permanently closed any of its field offices since Jan. 1, 2025, contrary to another rumor.
How Late Is Too Late?
It's never too late to start saving for retirement, but it's better to start early—investing later on can mean having to allocate more of your salary towards retirement.
“While I personally don’t believe that it’s ever ‘too late,’ I think it’s important to be realistic. The later in life you begin planning for retirement, the more aggressive your strategy will need to be. You may have to make some uncomfortable decisions, sacrifices, and big moves to get closer to your retirement goals," said Steve Sexton, CEO of Sexton Advisory Group in Temecula, California.
And yes, you might want to consider what a Social Security benefit cut would look like: If your monthly paychecks were reduced by 17%, would you have enough money saved up to to fund the gap? While Congress could act to resolve the shortfall before the trust fund runs dry, risk-averse savers should consider planning for the worst case scenario.
That might mean putting more money into an individual retirement account (IRA) and 401(k). Try to take advantage of your employer's 401(k) match, and if you're eligible, open a Roth IRA, as these accounts offer tax-free growth. And if you earn too much to contribute directly to a Roth IRA, you can convert your traditional IRA into a Roth—though you'll pay taxes when you do the conversion.
To understand more about how Social Security is designed to work, read the full article from Investopedia here.
The important thing is not to panic. Have a plan, work to shore up your savings, and know if you make an effort to prepare for retirement, you are in the right place. There are things you can't control about the future, and things you can. Focus on the latter, and make the moves necessary to make to help you feel more secure.