Retirement Social Security

The 22% Social Security Cut Threatening Retirees That Needs to Be Taken Seriously

Social Security benefits may be facing cuts, and retirees and workers alike need to gear up.

By Maurie Backman , Edited by Laura Hohenstein

Updated Oct. 13, 2026

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Social Security is one of the most important benefits for seniors today. Many retirees would not have the means to cover their expenses without those monthly checks.

The problem is that Social Security is facing major financial challenges that could result in broad benefit cuts within the decade. And while lawmakers have never let the program cut benefits, there's a first time for everything.

Here's how to prepare for potential Social Security cuts, whether you're still in the midst of your career or are already retired.

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Why Social Security faces sweeping benefit cuts

Social Security gets most of its income to pay benefits from payroll taxes. But a shrinking labor force is slashing that income stream.

Social Security can rely on its Old-Age and Survivors Insurance (OASI) Trust Fund to keep up with benefits for the time being. But once the OASI Trust Fund runs dry, program cuts could happen if lawmakers don't find a way to shore up Social Security's finances.

The Social Security Trustees expect the OASI Trust Fund to be depleted by late 2032. From there, benefits could face a 22% cut.

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Why you can't assume benefit cuts will be prevented

If you read up on Social Security cuts, you may see some scepticism over whether the program will actually reduce benefits. Put simply, Social Security has been in dire situations before where benefit cuts were a possibility. And Congress has never allowed Social Security to cut benefits in the past.

For example, in 1983, reforms were enacted to prevent Social Security cuts. Congress introduced a tax on Social Security benefits to help fund the program and gradually increased Social Security's full retirement age, which is when retirees can collect their monthly checks without a reduction. These changes helped keep the program solvent so that benefits remained payable in full.

But just because Social Security cuts were preventable in the past doesn't mean they're 100% safe this time around. So it's best to prepare for a potential reduction in benefits, even though it may be avoidable.

How to prepare for Social Security cuts if you're still working

If you're still working and earning a steady paycheck, one of the best ways to prepare for reduced Social Security benefits is to start funding an IRA or 401(k) plan consistently. The money in these accounts gets to grow in a tax-advantaged manner, making it easier to build wealth.

But the longer you wait to begin contributing to one of these accounts, the more money you might have to part with on a monthly basis to build a strong nest egg. If you give your money more time to grow, you can contribute less each month and let your investments do more of the heavy lifting.

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How to prepare for Social Security cuts if you're already retired

If you're already retired and collecting Social Security, preparing for cuts becomes harder. While people with regular paychecks can allocate a portion of their earnings to their retirement accounts, your income may be fully monopolized by essential bills.

That doesn't mean it's a hopeless situation, though. You may be able to go back to work and use your earnings to build yourself a small nest egg.

Will you be able to save as much as someone who contributes $250 a month to an IRA over 30 years? Probably not. But you can save something. And the money you sock away can serve as a nest egg to tap if your benefits are reduced in the future.

Another option is to try to reduce your expenses. That could mean moving to a cheaper part of the country. Or, it could mean going through your budget and spending more carefully.

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For example, let's say you don't have a mortgage on your home and its value is $500,000. Even after accounting for transaction fees, if you're able to replace it with a $250,000 home, you can pocket the difference and access that money as you need to if Social Security benefits are indeed cut.

Bottom line

There are some seniors today who are living on just Social Security. If you're one of them, it's imperative that you take steps to prepare for potential benefit cuts.

But even if you have retirement income outside of Social Security, it's important to prepare your finances in case your monthly checks shrink. And while you may not think you have to worry about Social Security cuts just yet if you're still working, the sooner you start making a backup plan, the less a potential cut might hurt you personally.

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