Social Security Could Shrink by 2032 Under Trump’s Budget — 2 Steps to Take Today
Written by
T. Woods
Edited by
Angela Corry
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Warnings that Social Security will be severely diminished by the 2030s have been abundant in recent years. Some experts have predicted Social Security be all but insolvent by 2036, others have warned that the program will be struggling by as early as 2033 — at which time America will only be able to pay out 77% of the benefits owed to beneficiaries.
Unfortunately, the depletion of Social Security’s major trust funds may come even sooner than that.
According to Social Security Administration Chief Actuary Karen Glenn, that depletion date has likely moved “from the first quarter of 2033 to the fourth quarter of 2032,” per the American Society of Pension Professionals & Actuaries. The reason? The cost of enacting President Donald Trump’s controversial One Big Beautiful Bill Act (OBBBA).
As reported by the Bipartisan Policy Center, the OBBBA will cost America $3.4 trillion over the next decade. That enormous price tag will require cutting into the trust fund that supplies retirement benefit payouts, thereby hastening the extreme diminishment of Social Security into 2032.
The government still has time to act, though, either by raising America’s current retirement age of 67, or by increasing the payroll tax — neither of which have been popular solutions with voters, or Congress. At present, it remains unknown just how, or even if, the government will work to save Social Security between now and the 2030s.
While it’s important to remember that Social Security will not entirely disappear by 2032 (the program will remain, albeit in an increasingly lessened capacity), it’s also important to prepare for an America in which Social Security recipients only receive a percentage of their benefits, rather than the full amount.
Per CNBC, here are specific ways you can prep for such an eventuality.
Download Your Social Security Statement
Regardless of how close (or far) you are from retirement, you can still create a Social Security website account and download your Social Security statement. That statement provides you with a breakdown of your estimated monthly Social Security payout (based upon the assumption that you’ll earn, at the very least, your current salary until your eventual retirement). It also provides you with eventualities: It will show you how much you’ll receive from Social Security based on whether you retire at age 67, 68 or above, and calculates the benefit bumps you’ll receive by waiting longer to retire.
Overall, the statement provides you with a rough estimate of what to expect from your Social Security benefits.
Calulate Your Future, Then Plan For The Worst
Once you gain access to your Social Security statement with its estimate of what you can expect in terms of benefits, CNBC recommends that process your retirement portfolio through a compounding interest calculator. This will allow you to calculate how much money you’re likely to have by retirement age.
Given that the average retiree can afford to withdraw approximately 4% of their savings per year in retirement and not run out of money, multiply your current retirement portfolio by 0.04 to learn your annual withdrawal amount, and then add to that your Social Security benefit. If the number you arrive at doesn’t seem like enough, it’s time to revise your retirement planning. If you approach your retirement with the worst-case scenario in mind, you’re more likely to save more, spend less, and be better prepared overall for any eventuality.
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