Social Security remains a critical source of retirement income, but the program is under growing financial strain, and the likelihood of benefit cuts by 2033 is becoming more real. That uncertainty is already changing behavior, with early claiming on the rise as Americans worry about securing their share. (Skip below to see how to model a reduction in benefits.)
The Social Security Trust Fund Is Projected to Be Depleted Sooner Than Expected
The 2025 report from the Social Security Board of Trustees reveals that Social Security’s trust fund is now projected to be depleted by 2033, or when today’s 59-year-olds turn 67. This depletion date is one year earlier compared to last year’s estimate which put the program at insolvency in 2034.
Why has the timeline moved up?
Several compounding factors are accelerating the shortfall:
- Rising healthcare costs and expanded eligibility
- The repeal of offsets under the Social Security Fairness Act (enacted January 5, 2025)
- An aging population, coupled with low birth rates and slower wage growth
- Reduced immigration and a shrinking workforce contributing less in payroll taxes
Isn’t Social Security funded by payroll taxes?
Yes — most of Social Security’s funding comes from payroll taxes paid by workers and employers. For decades, excess revenue was stored in the Trust Fund, creating a buffer.
But that buffer is now shrinking. With more retirees and fewer workers, the program is paying out more than it brings in, and the trust fund is being tapped to cover the gap.
What might happen in 2033?
When the Social Security Trust Fund is depleted, benefits won’t stop, but without further legislation, they will be reduced.
- Ongoing payroll taxes would still cover about 75–80% of scheduled benefits.
- The current projection is a ~23% across-the-board benefit cut.
So, someone expecting $2,000/month could receive just $1,540 starting in 2033.
Early Claiming is on the Rise
The looming uncertainty seems to be the reason behind a wave of early claims. There has been a 13% surge in early filers compared to last year, driven by fear and headlines.
Is Early Claiming a Good Strategy?
Experts have always recommended caution when it comes to claiming Social Security early. Delaying the start of benefits for as long as possible has always been the smart strategy even when you need to supplement your retirement income with personal savings.
Taking benefits at 62 instead of 67, for example, generally results in a lifetime payment that’s 30 percent lower. And for each year a retiree delays after their full retirement age, the monthly benefit amount rises 8 percent until age 70.
What is the traditional recommendation on early claiming?
Traditional Social Security claiming rules of thumb suggest that most people are best waiting to claim until their Full Retirement Age or later.
- Take Early: The only people who should consider taking their Social Security early are those who absolutely need the money immediately. Those who do not expect to live for very long, due to illness. You’re the lower-earning spouse, and your higher-earning spouse can wait to file for a higher benefit. You have minor or dependent children.
- Take at Full Retirement Age: If you believe that you will not live past the age of 80, then generally speaking, you will maximize your Social Security benefits if you take them when you reach your Full Retirement Age.
- Wait as Long as Possible: Are you confident that you will live past the age of 80 or 85? Then, most experts recommend that you defer your Social Security for as long as you can (age 70), so as to maximize the benefits you receive from it.
Does a future reduction in benefits change the recommendation on early claiming?
Let’s take a look at someone who has a Full Retirement Age (FRA) of 67 and is currently expected to receive a monthly benefit of $2,000 at FRA. If they were to claim at age 62, their benefit would be $1,400. And, they are expected to live until age 85.
The answer is, it depends, but probably not. If you believe that a reduction in benefits is going to happen and are confident that people who are already claiming Social Security will be spared a reduction in benefits, then you may want to claim early.
Here is a comparison of the “real” lifetime benefits (ignoring inflation) for the two claiming ages with and without a reduction in future benefits:
If claiming at 67 with no future reduction in benefits, they are projected to receive a total of $456,000 in Social Security “real” benefits over their lifetime.
- Monthly benefit: $2,000
- Duration: Age 67 to 85 = 19 years = 228 months
- Total = $2,000 × 228 = $456,000
If claiming at age 67 with a 23% reduction in benefits when they turn age 70, they are projected to receive $375,360 in Social Security “real” benefits over their lifetime.
- Benefit from 67–69 (3 years = 36 months): $2,000
- Benefit from 70–85 (16 years = 192 months): $1,580
- Total = $72,000 + $295,680 = $367,680
If claiming at 62 with no future reduction in benefits, they are projected to receive $403,200 in Social Security “real” benefits over their lifetime.
- Monthly benefit: $1,400
- Duration: Age 62 to 85 = 24 years = 288 months
- Total = $1,400 × 288 = $403,200
If claiming at 62 with a 23% reduction in benefits when they turn age 70, they are projected to receive $346,752 in Social Security “real” benefits over their lifetime.
- Benefit from age 62–69 (8 years = 96 months)
- Benefit from age 70-85 (16 years = 192 months)
- Total = $134,400 + $206,976 = $341,376
Modeling a Future Reduction to Your Social Security Benefits in the Boldin Planner
If you are worried about Social Security and want to model a future reduction to benefits, here is how to do it in the Boldin Planner, depending on your current situation:
Not yet collecting Social Security and plan to claim after 2033
If you are not yet collecting benefits and plan to claim your benefits after 2033, you can:
- Navigate to Planner > Income > Social Security in the Planner and decrease your Full Retirement Age (FRA) benefit by the percentage you predict benefits will be reduced. (Current projections suggest a 23% reduction. However, you can model different percentages.)
Already collecting Social Security
If you are already collecting Social Security benefits and want to model a future reduction, you can:
- Navigate to Planner > Income > Social Security in the Boldin Planner and state that you will not receive Social Security benefits
- Go to Planner > Income > Pensions and enter your current Social Security benefit as a pension that starts today and runs through 2033.
- Then, enter a second pension at the reduced Social Security benefit income to start in 2033 and run through your lifetime.
Plan to start Social Security benefits prior to 2033
If you plan to start Social benefits prior to 2033 and want to model a reduction in 2033, you should:
- Navigate to Planner > Income > Social Security in the Boldin Planner and state that you will not receive Social Security benefits
- Go to Planner > Income > Pensions and enter your Social Security benefit, starting at your projected start date and running through 2033.
- Then, enter a second pension at the reduced Social Security benefit income to run through your lifetime.
See Coach Nancy demonstrate how to turn off your Social Security benefit.
The 2025 Social Security Outlook Comes During Evolving Economic Times
The news of increasing trouble for Social Security comes amid fraught federal budget discussions and proposed cuts to many different programs. And, it is important to understand that the report’s core economic assumptions were from last year and don’t reflect how things have evolved with the Trump Administration.
Trump has promised that benefits will remain, but Congress has not yet made moves to shore up funding.
Can Social Security be saved?
Whether or not your benefits will be cut in the future is entirely dependent on who is elected to Congress and the presidency and how they choose to fix the problems.
But, the question isn’t can it be saved — it’s how and when. The sooner policymakers act, the more gradual and balanced the solutions can be. Delay narrows the options and increases the chances of across-the-board cuts. Here are some of the options being discussed:
Raise more revenue:
- Increase the payroll tax rate
- Lift or eliminate the income cap (currently only the first $168,600 of earnings is taxed)
- Tax other types of income
Adjust future benefits:
- Reduce benefits for high earners
- Only reduce benefits for future recipients, not current
- Raise the age at which you can start receiving benefits
- Change (reduce) annual Cost of Living Adjustments by using a different inflation measure
Broaden the contributor base:
- Increase the number of tax payers through delayed retirement, increased immigration or increasing the birthrate (this is why some countries subsidize children). Although this might just kick the can down the road.
Reallocate or rein in spending:
- Redirect money from the disability fund, which is in a better financial position, toward the payment of Social Security
- Increase efficiencies in the program
About Boldin
The Boldin Planner is powerful software that puts you in control. It’s almost like having a financial expert at your fingertips. Research shows that people with a written financial plan do 2.7 times better financially. They’re also 54% more likely to live comfortably in retirement. That’s not luck, that’s taking control of your money. The Boldin Planner has been named the Best Financial Planning Software of 2025 and the company was selected as a Top Innovator in UpLink’s Prospering in Longevity Challenge and named to the FinTech 100 by CBInsights.
