What would happen if Social Security ran short of funds for benefits?

Dear Rusty: What happens to seniors if the country runs out of money to pay monthly Social Security benefits? I am 78 years old and Social Security is my only source of income. Signed: Worried Senior 

Dear Worried Senior: There is no need to panic — the government will not simply run out of money to pay Social Security benefits. As long as workers continue contributing to the program, Social Security will always have at least some funds available to pay benefits. The concern you have been hearing about comes from recent reports about the program’s financial outlook, with potential trouble expected within a few years.

The main issue for you, and for everyone else who depends on Social Security, is that if the reserves in the Social Security Trust Fund, now estimated at about $2.5 trillion, are exhausted, monthly payments would be reduced. Current projections from the Social Security Trustees point to a cut of roughly 22 percent starting in the fall of 2032. Even so, that outcome would only occur if Congress failed to act before the trust fund is fully depleted. In our view, that is unlikely unless lawmakers completely neglect their responsibilities to seniors and their families.

At the AMAC Foundation, we are working hard to prevent the Social Security Trust Fund from being depleted, and we expect Congress will eventually step in to avoid any reduction in monthly benefits.

Allowing Social Security cuts to take effect would be politically disastrous for Congress and any president. It would also push more Americans into poverty. As we have said publicly before, we have already put forward a practical plan to restore Social Security to long-term solvency and are working with Congress and the Social Security Administration to encourage the needed reforms.

Although your concern is understandable, we believe it is very unlikely that you will see your monthly Social Security income reduced. We remain committed to preventing that outcome and will continue pressing Congress to make the changes needed before the trust fund is fully exhausted.

This article is for informational purposes only and should not be considered legal or financial advice. It reflects the opinions and interpretations of the AMAC Foundation staff, who are trained and accredited by the National Social Security Association. NSSA, the AMAC Foundation, and its staff are not affiliated with or endorsed by the Social Security Administration or any government agency. To submit a question, visit our website (amacfoundation.org/services/) or email [email protected]. Because we are a nonprofit organization, our services are free.