Social Security has long been a trusted source of retirement funds, keeping millions of seniors out of poverty by providing consistent, reliable lifetime income that is protected against inflation.

The big question, though, is whether these retirement benefits will continue to be a stable source of funding for generations to come. The answer to this question is, unfortunately, more complicated than you might think.

Here’s why.

Social Security’s trust fund is in financial trouble

If you are retired and rely on Social Security — or if you plan to retire in the future — you should know that Social Security’s trust fund is not in great shape.

According to the most recent Trustee’s report released in 2024, Social Security is currently paying out more money than it collects. As a result, its asset reserves are starting to decline. Based on current deficit spending, and ongoing projections for incoming revenue, the trust fund is expected to run out of money in 2035.

Considering that we are already almost a month into 2025, that means that we are now less than a decade away from the trust fund having no money to fund retirement benefits for the seniors who are counting on the money.

What does it mean for you if the trust fund is out of money?

So, what happens if 2035 arrives and the trust fund runs dry as projected? Unfortunately, the news is not great — but it’s also not as bad as you might think.

Social Security retirement benefits are not paid out of the general fund so, in theory, the government can’t just quickly and easily move money from somewhere else to cover the funding gap.

Instead, Social Security will be able to continue paying benefits, but only using the revenue that it’ collecting. This comes from the Social Security taxes current workers pay, as well as from the taxes on benefits that higher-earning retirees get hit with once their income reaches a certain threshold.  Social Security taxes are a pretty reliable revenue stream, so the good news is that Social Security will be able to continue paying at least some benefits.

The problem is that the necessary cuts resulting from the trust fund running dry are going to hit seniors hard. The revenue coming into Social Security is only enough to pay around 83% of promised benefits. That means vulnerable seniors could see a 17% reduction in their retirement income when the money in the trust fund is gone.

Will the trust fund be allowed to run out?

There’s definitely reason to be concerned about the impending depletion of Social Security’s reserves, especially now that we’re inside of a decade of the fateful date when the money will be gone.

However, lawmakers are probably not going to just allow these benefits to be reduced by 17%. The public outcry would be too strong.

When there was concern about Social Security’s financial issues in the past, Congress passed and the President signed reforms in 1983. The 1983 amendments took steps like pushing the full retirement age later, as well as introducing the taxes on retirement benefits that higher-earning seniors pay today.

The problem is that those changes were phased in over time and some are only now taking effect. Congress may be reluctant to make changes impacting the current benefits retirees are getting, which may be what has to happen if lawmakers don’t act soon to deal with Social Security’s financial issues.

Ultimately, incoming President Donald Trump may find himself pressured to deal with this problem as time runs short — which is going to be a challenge given that he promised no cuts to Social Security benefits.

Both current and future retirees should watch carefully to see what legislation is being discussed but should also come to terms with the fact that we could be less than 10 years from big changes to the benefits program whether we like it or not.

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