Will Social Security be around when I retire?

(NewsNation) — Social Security recipients could see their benefits slashed in roughly a decade if Congress doesn't take action but that doesn't mean you won't get a monthly check when you retire.

As long as workers and employers continue to pay payroll taxes — the program's primary source of income — Social Security will have money to pay benefits. But without reforms, those benefits could be reduced.

Social Security uses two separate trust funds to pay out benefits. If those trust funds are combined, then the trustees project that Social Security will only be able to pay 83% of scheduled benefits in 2035 — declining to 73% by 2098.

A 17% cut today would reduce the average retired worker's typical check by about $324 per month, or $3,888 per year.

The program's looming financial shortfall isn't unexpected: Americans are living longer, the share of older adults is growing and birth rates have been falling. In other words, more people are set to receive benefits while fewer are paying into the system.

Despite the foreseeable challenges, policymakers haven't agreed on a solution.

The lack of a plan has Americans feeling uncertain about the program's viability, with a majority of adults under 45 saying they're not confident in the future of Social Security, according to a 2023 AP/NORC poll.

Both former President Donald Trump and Vice President Kamala Harris have vowed to protect the program, though neither have discussed the issue in detail on the campaign trail.

How likely is a Social Security benefit cut?

In its nearly 90-year history, Social Security has never lacked the funds to pay scheduled benefits, according to the Urban Institute.

However, the program has faced funding challenges in the past.

Back in 1983, Social Security insolvency was just months away before Congress stepped in. Those reforms led to a gradual rise in the normal retirement age from 65 to 67. At the time, the trustees projected the changes would allow the program to be solvent through 2060 but over the years that deadline has moved up to roughly a decade from now.

The Brookings Institution says today's financing challenge is "at least double" what it was in 1983.

Ten years may seem like a long time to fix the program but experts warn that the problem will become more complicated the longer it's unresolved.

"Delaying action means that some options disappear, the eventual changes must be more abrupt, and fewer of the current adult generations participate in the fix," Alicia Munnell, director of the Center for Retirement Research at Boston College, wrote in a recent research brief.

Munnell warned that Congress must act quickly to avoid "draconian benefit cuts."

As for whether lawmakers will allow those cuts to occur, Nancy Altman, president of Social Security Works, said it's unlikely.

"If that ever happened, every member of Congress would be voted out of office," she told NewsNation in a recent interview.

Lawmakers could address the funding dilemma by uncapping payroll taxes, changing eligibility requirements, trimming benefits or some combination.

Congressional Democrats have introduced multiple bills to address the shortfall by extending the payroll tax to those with higher incomes, an idea that polling suggests is popular with voters.

Meanwhile, Republicans have been less upfront about their vision for the program and haven't introduced legislation in Congress recently.

The Republican Study Committee (RSC), which comprises nearly 80% of all House Republicans, has proposed raising the retirement age for those not near retirement “to account for increases in life expectancy." The RSC said it doesn't support cutting or delaying retirement benefits for any senior in or near retirement.

What can workers do to prepare?

While Social Security isn't going away, workers should begin saving for retirement as early as possible. The federal program is meant to replace about 40% of preretirement earnings, meaning most people rely on additional savings.

The Social Security Administration puts it like this: Just $25 a week invested at 5% interest for 40 years will grow to about $165,000. Savers who stash $50 a week would have roughly $300,000 after 40 years at a 5% annual return.

Tax-advantaged retirement accounts like 401(k)s or IRAs are a great option. Those accounts allow savers to invest and build their nest eggs over time.

Deciding when to claim Social Security will also impact your monthly check. Although the ideal age varies from person to person, research suggests retirees are generally better off waiting until 70 to collect. At that point, beneficiaries can earn up to 124% of their full benefit.

Another important consideration to maximize your benefits: Work for at least 35 years because the size of your monthly check is based on your highest 35 years of earnings.