Buffett once warned that cutting Social Security would be a mistake — now the CBO warns benefits could fall 26% by 2032, or about $543 a month for the average retiree

Warren Buffett warned about this more than 20 years ago.

At a Berkshire Hathaway meeting in 2005, he said, “I basically believe that anything that would take Social Security payments below their present guaranteed level is a mistake.”

Now, that concern is looking more relevant. The Social Security retirement trust fund is projected to run out as soon as 2032. When that happens, retirees could see benefits reduced by about a quarter, although the exact figure depends on which federal estimate is used. The trustees project a 22% reduction, while the Congressional Budget Office (CBO) puts the cut at 26%.

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Using the higher CBO estimate, the average retired worker benefit of $2,088.79 would translate into a monthly loss of about $543.

The positive side is that six years can still be enough time to address a shortfall of that size — if action starts now. Here are a few things to keep in mind.

Social responsibility

In his comments to shareholders, Buffett likened Social Security to tax credits and incentives for children, another group that cannot support itself through work because of age.

“I think that this is an extraordinarily rich country and that the people in their productive years can take care of those outside in both areas… a rich country takes care of its young and it takes care of its old,” he said at the 2005 Berkshire Hathaway meeting. “We try to provide good schools and health and everything for the young overall as part of our overall responsibility. I believe that a rich country should be doing the same for the older people.”

If benefits are reduced, that could mean the country is failing to meet that obligation and weakening the promise made to workers who have contributed to the system for decades.

To strengthen Social Security, Buffett proposed raising the retirement age and removing the income cap on payroll taxes, which is currently set at $184,500.

But with entitlement reform facing persistent political gridlock, those changes appear unlikely anytime soon. That means many Americans may need to take steps now to protect their retirement finances.

Building your own nest egg

Given the uncertainty surrounding the safety net, it makes sense to build a retirement cushion of your own.

Talk with a financial planner about diversifying income sources beyond Social Security. You may also want to boost contributions to a 401(k), IRA, or other investment accounts. An HSA can be another tax-efficient tool for setting aside money for health care costs in retirement.

Another possibility is delaying retirement. A survey by F&G found that nearly 70% of Americans over 50 have considered doing so.

Even though Social Security cuts are not certain, relying less on the program can help create a more secure retirement.