Why is Social Security going broke?

Social Security is facing a funding shortfall, not going "broke," because more retirees are drawing benefits while fewer workers pay in, driven by the aging Baby Boomer generation and lower birth rates, meaning projected tax revenue won't cover 100% of promised benefits after the trust funds are depleted around 2033-2034, requiring legislative action like raising taxes or cutting benefits.

What is the biggest problem with Social Security?

The gap between tax dollars flowing into the system and benefits flowing out is getting wider. The main issue is with Social Security's retirement program, whose costs have exceeded its income every year since 2021. The gap, which was $70.4 billion in 2023, is projected to balloon to $414.5 billion in 2033.

Why are we running out of money for Social Security?

Widening earnings inequality.

This trend diminishes Social Security's revenues and worsens its financial condition. By one estimate, if 90 percent of overall earnings had been subject to Social Security payroll taxes since 1983, the program's long-term financing gap would be about 25 percent lower today.

What is causing the Social Security crisis?

Much of the crisis is being fueled by the overall aging of the U.S. population. Payroll taxes are the primary source of Social Security's funding—and the ratio of working people to retirees has been steadily shrinking since 1950, when there were 16.5 workers to support each retired beneficiary. Today, the ratio is 2.7.

Is Social Security at risk of collapse?

For decades, interest from the Social Security trust fund helped cover shortfalls, but since around 2019, payouts have exceeded revenues and interest earnings. Current projections show the trust fund could be depleted by 2033, which would lead to a potential 23% reduction in benefit payments if no action is taken.

Social Security is BANKRUPT—Here’s What Happens Next

How much do you have to make to get $3,000 a month in Social Security?

To get around $3,000/month in Social Security, you generally need a high earning history, around $100,000-$108,000+ annually over your top 35 years, but waiting to claim until age 70 maximizes this amount, potentially reaching it with lower yearly earnings, say under $70k if you wait long enough, as benefits are based on your highest indexed earnings over 35 years. The exact amount depends heavily on your specific earnings history and the age you start collecting benefits. 

What does Warren Buffett say about Social Security?

Warren Buffett's core message on Social Security is that cutting benefits is a major mistake, as a rich country must care for its elderly, but he acknowledges the system's financial challenges and suggests solutions like raising the taxable income cap for Social Security taxes, slightly increasing the payroll tax, and gradually raising the retirement age, urging Congress to act before trust fund insolvency forces drastic cuts. He sees Social Security as a vital, successful government program that needs responsible adjustments, not benefit reductions. 

What is going on with Social Security in 2025?

In 2025, Social Security beneficiaries saw a 2.5% Cost-of-Living Adjustment (COLA), raising average benefits by about $49 monthly, alongside an increased Social Security tax cap for high earners to $176,100. Significant legislative changes, like the Social Security Fairness Act, started impacting taxes and benefit adjustments for some, while the ongoing debate about long-term solvency continued, with projections showing trust fund depletion by the 2030s if no action is taken. 

What did President Johnson do to Social Security?

President Lyndon B. Johnson significantly expanded Social Security in the 1960s, most notably by signing the 1965 Amendments that established Medicare (health insurance for the elderly) and Medicaid, while also increasing benefits, broadening disability criteria, and adding coverage for other groups, though he also shifted Social Security's accounting into the general budget. 

How much Social Security will you get if you make $60,000 a year?

If you consistently earn around $60,000 annually over your career, you can expect a monthly Social Security benefit of roughly $2,100 to $2,300 at your full retirement age (FRA), but the exact amount varies by your birth year and claiming age; for instance, at FRA, it's around $2,311 based on 2025 bend points, while claiming at 62 yields less and claiming at 70 yields more, with an official estimate available on the Social Security Administration (SSA) website. 

What is the highest Social Security check anyone can get?

The maximum Social Security benefit varies by retirement age, with the highest possible monthly amount in 2026 being around $5,181 if you wait until age 70, while claiming at Full Retirement Age (FRA) yields about $4,152, and claiming at age 62 results in approximately $2,969. To get the maximum, you must have earned the taxable maximum for at least 35 years, had significant earnings above the annual wage base ($184,500 in 2026), and delayed claiming benefits past your FRA. 

What is happening on March 31, 2025 with Social Security?

At the conclusion of the transition period, on March 31, 2025, SSA will enforce online digital identity proofing and in-person identity proofing. SSA will permit individuals who do not or cannot use the agency's online “my Social Security” services to start their claim for benefits on the telephone.

What does Suze Orman say about when to take Social Security?

Suze Orman strongly advises waiting as long as possible to claim Social Security, ideally until age 70, to maximize your monthly benefit, explaining that delaying provides a significant guaranteed annual increase (around 8%) and offers crucial inflation protection for a longer retirement. While some suggest claiming at 62 and investing the money, Orman counters that most people don't invest it and end up with less income long-term, emphasizing that a higher monthly check with cost-of-living adjustments (COLAs) is a better, more secure financial tool, especially for the surviving spouse. 

What will replace social security benefits?

In the proposals presented to the Commission, the use of retirement bonds--and annuities based on bond accumulations- would also replace the entire benefit structure of Social Security for the future.

Why won't Congress fix Social Security?

Both parties have been reluctant to move Social Security legislation because doing so would come with political pain: raising taxes or cutting benefits. Even so, there are several powerful reasons for Congress to tackle Social Security solvency in 2025.

When your spouse dies, do you get their Social Security?

Yes, a surviving spouse can receive Social Security benefits, often up to 100% of the deceased spouse's amount if they've reached full retirement age (FRA), but you usually get the higher amount of your own or your spouse's benefit, not both, and you must apply. Eligibility as a widow/widower generally requires being age 60+, or age 50+ with a disability, or any age if caring for the deceased's young child, with specific rules for divorced spouses. 

What did Bill Clinton do to Social Security?

August 15, 1994 President Clinton signed legislation (H.R. 4277) establishing the Social Security Administration as an independent agency.

Can a US citizen who never worked get Social Security?

But even if you never worked and therefore don't have an earnings record, you're not necessarily out of luck. If you're married (or were married) to someone who's entitled to Social Security, you can collect spousal benefits equal to 50% of your husband or wife's benefits at full retirement age.

What president took the most from Social Security?

“Next time a Republican tells you that 'Social Security is broke,' remind them that Pres. Bush 'borrowed' $1.37 trillion of Social Security surplus revenue to pay for his tax cuts for the rich and his war in Iraq and never paid it back”.

Who qualifies for an extra $144 added to their Social Security?

You qualify for an extra ~$144 on your Social Security check if you have a Medicare Advantage (Part C) plan with a "Part B Giveback" benefit, which refunds some or all of your Medicare Part B premium, appearing as extra cash in your check, but eligibility depends on living in the plan's service area and paying your own Part B premiums. The "144" figure was common when the Part B premium was around that amount, but the actual refund varies by plan and location, potentially exceeding the full premium. 

How many people have $1,000,000 in retirement savings?

Data from the Federal Reserve's Survey of Consumer Finances, shows that only 4.7% of Americans have at least $1 million saved in retirement-specific accounts such as 401ks and IRAs. Just 1.8% have $2 million, and only 0.8% have saved $3 million or more.

What did Congress just pass regarding Social Security?

What is the Social Security Fairness Act (Act) and who does it help? The Act was signed into law on January 5, 2025. The Act ends the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).

What did Dave Ramsey say about Social Security?

Dave Ramsey's Social Security advice centers on claiming benefits at the earliest age, 62, and investing that money to grow, arguing it can outperform waiting for a larger monthly check, especially for those with sufficient other retirement savings and discipline to invest wisely. This contrasts with standard advice to delay for higher guaranteed payments, but Ramsey views Social Security as a supplement, not the main retirement income, suggesting taking the early cash flow for investment growth while focusing on building wealth outside the government system. 

Is there a market crash coming in 2026?

While no one can predict a crash with certainty, some analysts see risks for a market downturn in 2026 due to factors like high valuations (especially in AI), potential economic shifts, and historical patterns around midterm elections, while others remain optimistic, pointing to strong AI growth and potential Fed rate cuts, suggesting a volatile but perhaps manageable year with potential pullbacks rather than a full crash. Options trading shows a low but non-zero chance (around 8-10%) of a significant drop, but also a higher chance of large gains, indicating mixed investor sentiment. 

Does Oprah Winfrey collect Social Security?

Whether Oprah actually collects Social Security is unknown since she hasn't made that information public. But if she does, her check wouldn't be dramatically larger than what high-earning professionals receive. The system caps out at around $5,000 per month regardless of how wealthy you are.