Debunking the Social Security Myth: Will it Run Out by 2035?

Social Security
Social Security

By Kelley Muhsemann
Marketing Manager

The “death of social security” has been reported for decades, but the latest headlines threaten it to run out by 2035 – a mere 12 years from now. Is it fearmongering, or should you be legitimately concerned? Let’s dive into several topics surrounding this rumor, its origins, and find out – once and for all – if social security’s time is running out.

The Rumor and its Origins
The rumor that Social Security will run out by 2035 has been circulating for many years. It often arises from a misunderstanding of the Social Security Trustees’ annual reports. These reports project the program’s financial health over a 75-year time horizon, and predictions about its future can vary based on a range of economic factors and assumptions. These reports typically indicate that the Social Security Trust Fund is projected to be depleted around 2035. However, this does not mean that Social Security will cease to exist at that time. It simply indicates that if no changes are made to the program, it will be able to pay approximately 79% of scheduled benefits from the payroll taxes collected. Although this is a significant concern, it does not translate to the program’s total collapse.

Factors Contributing to the Concern
Several factors contribute to the projection that Social Security will be depleted by 2035. The aging population and the retirement of the baby boomer generation have increased the number of beneficiaries receiving Social Security benefits. Simultaneously, the number of workers paying into the system has not kept pace. This demographic shift is placing pressure on the program’s financial resources. Rising healthcare costs and longer life expectancies have further strained Social Security’s finances. As beneficiaries live longer, they receive benefits for an extended period, increasing the program’s costs. Inflation and stagnant wage growth have also played a role in weakening the program’s long-term financial outlook.

Government Measures to Address the Issue
The government is well aware of the challenges facing Social Security and has taken steps to address them. Some of the measures include:

  1. Adjusting the retirement age. The full retirement age for Social Security benefits has been gradually increasing from 65 to 67. This change aims to encourage individuals to work longer and reduce the strain on the system.
  2. Increasing payroll taxes. Raising the payroll tax rate, expanding the income subject to Social Security taxes, or both, could help generate more revenue for the program.
  3. Means-testing benefits. Implementing means-testing for Social Security benefits can ensure that those who are wealthy receive reduced benefits, preserving resources for those who genuinely need the support.
  4. Implementing cost-saving measures. The government can take steps to reduce the program’s administrative costs and increase efficiency in delivering benefits.
  5. Raising the cap on earnings subject to Social Security taxes. Currently, only income up to a certain cap is subject to Social Security taxes. Increasing this cap would generate additional revenue.

Three Reasons Why Social Security Is Here to Stay

  1. Social Security is primarily funded through payroll taxes collected from current workers and their employers. As long as people continue to work and earn income, payroll tax revenue will flow into the Social Security Trust Fund. This revenue provides a steady stream of income that helps support the program. While there may be demographic shifts and economic fluctuations, there will always be a source of revenue if people are employed and earning wages.
  2. The government and policymakers have a history of making adjustments and reforms to address Social Security’s financial challenges. As the program’s financial outlook changes, they can implement measures to ensure its sustainability, which can provide additional revenue and reduce the program’s costs, helping to maintain its solvency well beyond 2035.
  3. Social Security is a highly popular and politically sensitive program. It has a significant impact on the financial well-being of millions of Americans, particularly retirees and those with disabilities. The public and political will to preserve Social Security is strong, and policymakers are incentivized to find solutions to address its financial challenges. It’s unlikely that they would allow the program to collapse without taking action to safeguard it. The discussions and debates around Social Security’s future are ongoing, and while it may require changes to ensure its long-term viability, the program is expected to continue providing support to those who rely on it.

There are compelling reasons to believe that Social Security won’t run out by 2035. The program has a reliable source of revenue, a history of adjustments and reforms, and strong public and political support. Even if the Trust Fund is projected to be depleted, it doesn’t mean that Social Security will cease to exist, but rather that it might only be able to pay a slightly reduced level of benefits, and policymakers can take steps to address this issue before it happens. With proactive measures and responsible decision-making, Social Security can continue to fulfill its vital role in providing financial security to Americans for years to come.

If you would like to speak with our team of CERTIFIED FINANCAL PLANNERTM (CFP®) professionals, we would be happy to show you how our financial planning process can help you stay on track and achieve your financial goals. Please contact us for a complimentary discovery call at 631.218.0077 or at info@rwroge.com.


R.W. Rogé & Company, Inc. is an independent, fee-only financial planning and investment management firm serving clients locally and virtually across the country, with Long Island, New York, Beverly, Massachusetts, and Naples, Florida office locations. R.W. Rogé & Company, Inc. was founded on a “client first” culture and proudly commits to acting in your best interest as a fiduciary. We help clients Plan, Achieve, and Live® the life they want since 1986. To learn more about how we do this, click here.

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