Can You Live on 78% of Your Social Security Check? You Might Have To

Most people would agree that Social Security is one of the most important benefits for seniors. But the program is facing a serious financial crisis that could soon come to a head.

The Social Security Trustees' latest report revealed that the program is closer to insolvency than some might imagine. And that could end up being a problem for seniors.

Projections show that Social Security benefits may be headed for a big reduction, and while that's not guaranteed to happen, it's crucial to prepare.

The clock is ticking down toward insolvency

The Social Security Trustees recently reported that the program's Old-Age and Survivors Insurance (OASI) Trust Fund will only be able to pay benefits through the fourth quarter of 2032. Once the OASI Trust Fund runs out, Social Security can still continue to pay partial benefits. That's because the program will have incoming revenue from payroll taxes.

But due to a shrinking labor force, the program is not expected to have enough money to pay benefits in full once the OASI Trust Fund runs out. At that point, Social Security could be looking at a 22% cut across the board.

The average monthly check could lose a lot of buying power

There are many seniors who get most or all of their retirement income from Social Security. And people in that situation cannot afford a 22% benefit cut.

The average monthly Social Security benefit for retirees as of June 2026 was $2,084. A 22% cut means that the typical senior on Social Security would lose out on $458 a month. In the course of a year, that's a $5,550 reduction in income.

That's a problem because 37% of older adults today feel financially insecure, according to AARP. If seniors are struggling already, it's hard to imagine how they'll get by on just 78% of their current income.

Benefit cuts aren't a given

One important thing to realize is that Social Security cuts are not set in stone. If lawmakers don't act, the program may be looking at steep cuts in just six years. But Social Security has faced financial challenges before, and lawmakers have never allowed the program to cut benefits broadly. Therefore, there's a good chance they'll come to the rescue this time around, too.

But the solutions to prevent Social Security cuts may be painful. Some options include raising the payroll tax rate, which would burden working Americans with higher taxes, and pushing back full retirement age for Social Security, which could either force people to work longer or accept reduced benefits if waiting to file isn't an option.

The time to prepare for potential cuts is now

Even though Social Security cuts may not happen, the best thing to do is assume they will. If you're already retired, it's not necessarily too late to build savings. You can try getting a part-time job and banking your earnings so you're able to build up a nest egg.

If you're still working full-time, the answer is clear: Take full advantage of your steady paycheck and make steady contributions to a retirement account. Not only that, but make sure to invest your money so it's able to grow over time.

If retirement is many years away, loading up on stocks is generally a good bet. Though there's risk in putting money into the stock market, with a long savings window, you should have time to ride out periods of decline and ultimately come out ahead.

If you're already making a point to save for retirement, see what percentage of your paycheck is going into your IRA or 401(k). If it's well under 15%, try to ramp up to a higher savings rate over time.

A strategy that tends to work well is saving your annual raise automatically rather than spending it. Cutting some expenses in your budget could also free up more funds for your long-term savings, which could come in very handy if Social Security doesn't end up paying retirement benefits in full.

Bottom line

Lawmakers are aware that allowing Social Security to cut benefits could spur a major poverty crisis among retirees. So there's a good chance they'll be motivated to prevent those cuts, and that they'll take action ahead of the 2032 deadline.

But you shouldn't assume that benefit cuts won't happen. The solutions to prevent those cuts are complicated and come with repercussions of their own. So it's best to set yourself up with income outside of Social Security, so you have more options.

Saving well for your senior years could help you eliminate some stress living on Social Security. That means funding an IRA or 401(k) consistently while you're still working in the hopes of lining up enough supplemental income to absorb a 22% Social Security cut. Even without reduced benefits, you shouldn't expect Social Security to cover your costs in full, so saving well is really one of the best things you can do for yourself.