Feb 10, 2025
There’s widespread concern about the sustainability of the Social Security program.
According to the Congressional Budget Office (CBO), the Social Security Old-Age and Survivors Insurance (OASI) trust fund reserves will be exhausted by the end of fiscal year (FY) 2033, while the combined Social Security trust funds (OASDI) will be insolvent by the end of 2034.
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That’s just nine years away. Unsurprisingly, these headlines are causing some anxiety for workers who pay into the fund with every paycheck.
In 2023, financial expert Suze Orman attempted to ease these concerns with a post on LinkedIn. “Payments will not stop,” she promised.
Here are the reasons why the personal finance guru believes Americans should be less pessimistic about the fate of the social safety net.
Reasons not to worry
The biggest reason Orman isn’t concerned about the reserve depletion is because it wouldn’t halt Social Security payments, simply reduce them. “The worst-case scenario is that earned benefits would need to be cut by around 25% to deal with the cash shortfall,” she said.
This is also the conclusion of the CBO. By 2034, the office estimates that the OASI trust fund will have enough dedicated revenue to pay 75% of scheduled benefits.
Orman also points out that this isn’t the first time the Social Security system has faced a crunch. The trust fund was just three months away from depletion in 1983, when President Ronald Reagan and Congress jointly reformed the system.
“One of the biggest changes made back then was to gradually raise the full retirement age — when you are entitled to 100% of your benefit — from 65 to 67,” Orman explained. This helped keep the fund solvent.
She expects similar reform, which could impact retirees and people over the age of 55 but less so than younger workers.
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While taxpayers can’t control legislative reforms or funding, they can control when they claim their benefits. “You can claim any time between age 62 and age 70. And every month that you delay earns you a slightly higher payout,” she said.
She recommends high-income and relatively healthy workers wait as long as possible to maximize their benefits.
With these factors in mind, Orman believes the fear that social security will “run out” is overblown. However, public sentiment doesn’t seem to match her optimism.
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Do Americans agree?
Preserving the Social Security system is one of the bipartisan issues in modern America. According to a survey by the National Institute on Retirement Security, 90% of Democrats, 86% of Republicans and 88% of Independent voters believe Social Security should be a top priority.
However, the Trump administration’s plans to cut taxes and deport immigrants, who contribute to the Social Security fund even if they’re here illegally, could worsen the crisis, according to the Committee for a Responsible Federal Budget, a nonpartisan organization focused on fiscal issues.
Taxpayers are pessimistic about the chances of a rescue. Nearly three-quarters (72%) of adults worry the Social Security system will run out of funding in their lifetime, according to a 2024 survey by Nationwide, while 23% believe they might never see a single dollar in benefits from the system.
These concerns should spur more action to independently secure your retirement. Boosting your income and lowering expenses to maximize savings and investments could help you create your own safety net for when you retire — regardless of how much you eventually receive in Social Security benefits.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
