For millions of Americans, Social Security is more than a program—it’s a lifeline. Those monthly checks help pay rent, cover prescriptions, and keep food on the table. But according to the 2025 Social Security Trustees Report, benefits could face a steep reduction in less than a decade
If no action is taken, retirees may see a 23% cut in monthly checks by 2033 — equal to about $553 less per month for the average retired worker.
Why Benefits Could Be Reduced
Social Security is funded in two main ways:
- Payroll taxes collected from workers and employers.
- OASI trust fund reserves (Old-Age and Survivors Insurance), which hold past surpluses invested in U.S. Treasury bonds.
The challenge is that by 2033, the trust fund reserves will be depleted. Payroll taxes will still come in, but they’ll only be enough to pay about 77% of promised benefits.
How Much Money Are We Talking About?
In June 2025, the average retired worker’s benefit was $2,005.05 per month — the first time the average check passed $2,000.
With annual cost-of-living adjustments (COLA) averaging 2.3%, the average check could climb to around $2,405 by 2033.
But if a 23% cut occurs, that benefit would fall to $1,852, a loss of $553 per month.
| Year | Projected Average Benefit | After 23% Cut | Monthly Loss |
|---|---|---|---|
| 2025 | $2,005 | $1,544 | $461 |
| 2033 | $2,405 | $1,852 | $553 |
For retirees who rely almost entirely on Social Security, this drop would be financially devastating.
Why Social Security Faces a Shortfall
Several factors are putting pressure on the system:
- More retirees, fewer workers paying in.
- People living longer, collecting benefits for more years.
- Lower birth rates, leading to fewer future workers.
- Reduced immigration, slowing workforce growth.
- Payroll tax cap: in 2025, only the first $176,100 of income is taxed for Social Security. Earnings above that aren’t taxed.
- Congressional inaction: decades of delay have made fixes harder.
Possible Solutions Under Debate
Lawmakers and experts have floated a number of proposals to fix the funding gap. Options include:
- Raising or removing the payroll tax cap so high earners contribute more.
- Increasing payroll tax rates for both workers and employers.
- Raising the full retirement age, which would reduce lifetime benefits for future retirees.
- Changing COLA calculations, tying cost-of-living increases to a slower inflation index.
- Means testing, phasing out benefits for wealthier retirees.
Each solution comes with trade-offs, but acting sooner could avoid sudden cuts.
Why Action Can’t Wait
The Trustees emphasize that fixing Social Security early allows for gradual changes. Waiting until 2033 could mean sharp benefit cuts or sudden tax hikes.
It’s important to be clear: Social Security isn’t going bankrupt. Payroll taxes will continue, covering about 77% of benefits. Cuts would only happen if Congress does not step in.
For more details, you can review the official 2025 Social Security Trustees Report.
Frequently Asked Questions
Q: How much could Social Security benefits be cut by 2033?
About 23%, or roughly $553 per month for the average retired worker.
Q: Will Social Security run out of money completely?
No. Payroll taxes will keep coming in, but without reform, only about three-quarters of benefits can be paid.
Q: Why is Social Security facing a shortfall?
Fewer workers, longer retirements, falling birth rates, and a tax cap that limits contributions from higher earners.
Q: What is the payroll tax cap in 2025?
Only income up to $176,100 is subject to Social Security payroll taxes.
Final Thoughts
Social Security benefits are at risk of a $553 monthly reduction for future retirees if no reforms are passed. While the program won’t disappear, it will only be able to pay about 77% of scheduled benefits starting in 2033.
The good news? Solutions exist. The challenge is getting Congress to act — and the sooner they do, the less painful the changes will be.
For today’s workers and tomorrow’s retirees, staying informed and planning ahead is key.