Most Americans Misjudge Social Security’s Future: Here’s What They’re Missing
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Despite looming funding issues, most Americans remain confident in Social Security. A new Cato Institute survey found that 83% of adults view the program favorably, including 90% of Democrats, 82% of Republicans and 81% of independents. In addition, 82% of workers expect Social Security to provide at least part of their retirement income.
Yet this optimism doesn’t reflect what the program’s financial projections show. Many Americans misunderstand just how underfunded Social Security is — and what that could mean for future benefits.
Here’s what the data reveals and what workers need to know now.
Most Americans Don’t Realize How Underfunded Social Security Really Is
While 68% of Americans know Social Security isn’t fully funded, only 24% recognize that the program is extremely underfunded. That gap matters: It suggests most people aren’t preparing for the possibility of significant benefit cuts.
“Social Security is extremely underfunded,” said Emily Ekins, vice president and director of polling at the Cato Institute. “By law, if Congress does not act, then benefits will need to be cut by about a quarter in 2033.”
The math behind this shortfall is straightforward: Social Security now pays out more in benefits than it collects in taxes — and this imbalance is accelerating as baby boomers retire.
“In 1950, 16 workers paid into Social Security for every one person receiving benefits,” Ekins said. “Today, only about 2.7 workers pay into the system for each beneficiary.”
That shrinking ratio means fewer workers are supporting more retirees, leaving a widening funding gap.
Americans Reject Both Benefit Cuts and Tax Hikes To Fix Social Security
Even though the program is running short on money, most Americans oppose policy options that could help close the gap. According to the survey, 77% oppose cutting Social Security benefits — and the same share opposes meaningful tax increases.
This tension highlights a widespread misunderstanding about how Social Security works.
“Social Security is a program in which current workers pay Social Security taxes that directly pay for the benefits of current retirees,” Ekins said. “This means that workers’ taxes do not go toward their own future benefits, like in a retirement savings account. Their tax dollars pay for the benefits of other people.”
Because the system is pay-as-you-go, not savings-based, workers today aren’t building up an account for themselves. They’re funding the generation ahead of them — and they will rely on future workers to fund their own benefits, which is a design that becomes harder to sustain when demographics shift, as they have over the past several decades.
“Our survey found people are unwilling to pay higher taxes if those taxes do not benefit themselves,” Ekins said.
So, if workers hesitate to support tax increases that maintain benefits for today’s retirees, yet also oppose benefit cuts, this leaves lawmakers with limited politically feasible options.
Another Misunderstanding To Consider
A significant share of Americans also mistakenly believes Social Security functions like a guaranteed government savings account, but the program doesn’t work that way.
“Congress can change the rules, and benefit levels are not guaranteed,” Ekins said.
What This Means for Americans Planning Retirement
Social Security remains a critical source of income for millions of U.S. retirees, and most workers (82%) expect it to be part of their retirement plan. But the program’s projected funding shortfall raises important questions about what future benefits might look like.
Unless Congress acts, automatic benefit cuts of about 25% could begin as soon as 2033, affecting current retirees as well as future ones. Understanding how the program works — and what changes may be coming — is essential for long-term financial planning.
As policymakers debate solutions, Americans will need clearer information about what’s at stake and how different reforms could affect them. Increased awareness today can help workers make better decisions about their financial futures.
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