What Happens to Social Security Running Out by 2035?

Social Security’s future is becoming increasingly precarious, with policymakers warning that the program is slowly exhausting its reserves. While the system won’t completely disappear by 2035, the mechanics of how it operates may shift dramatically. Understanding when and how social security running out could affect you requires looking at the demographic and financial realities shaping the program’s trajectory.

Why Is Social Security Running Out of Money?

The core issue isn’t complicated: America’s population is aging while fewer young people are entering the workforce. Today, approximately 58 million Americans are aged 65 and older. By 2035, that number will surge to over 78 million. Meanwhile, the ratio of workers paying into Social Security through payroll taxes is shrinking compared to the number of retirees drawing benefits.

Currently, payroll taxes are expected to cover about 78% of scheduled benefits. This means roughly 22% of promised payments would need to come from somewhere else—typically the trust fund’s accumulated reserves. As these reserves dwindle, the program faces what experts call a “funding gap.”

For half of elderly married couples and 70% of elderly single people, Social Security represents at least half their total income. That’s why discussions about the program’s solvency matter so much to millions of Americans.

The Reality Check: What Could Change by 2035

Without intervention, the scenario is stark: if no changes are made to address the trust fund shortfall, benefit payments could need to be reduced by more than 25%. For many retirees, that would translate into significantly lower monthly checks than they’d been expecting.

However, benefit cuts aren’t the only outcome. Congress has other levers it could pull, ranging from tax increases to adjustments in how the program calculates benefits. Experts generally believe lawmakers will act before 2035 rather than allow such dramatic cuts to take effect.

Most policymakers agree that something must change. The disagreement centers on what. Some favor tax increases, while others prefer adjusting eligibility rules or benefit calculations based on life expectancy trends.

Five Strategies to Keep Social Security Running Out From Happening

Several concrete proposals have emerged to address social security running out. Here’s how each would work:

Raising the Payroll Tax Rate

Social Security is currently funded by a 6.2% payroll tax paid by workers, matched by a 6.2% contribution from employers (self-employed individuals pay the full 12.4%). To keep the trust fund stable without cutting benefits, these rates could increase. The challenge: nobody wants higher taxes, yet everyone wants larger Social Security checks. Tax increases could be distributed equally between employers and employees, or weighted more toward employers to reduce the visible burden on workers.

Expanding Taxable Wages

Currently, only income up to a certain threshold—$176,100 in 2025—is subject to Social Security taxes. Any earnings above that amount escape the payroll tax entirely. By raising or eliminating this cap, the program could collect more revenue. This approach would primarily affect high-income earners, as someone earning $80,000 annually already pays taxes on their entire income. Removing the wage cap would mean wealthy individuals contribute proportionally more while most workers see no change.

Raising the Full Retirement Age

Rather than increasing taxes, Congress might gradually raise the Full Retirement Age (FRA). Currently set at 67 for most younger workers, proposals suggest inching it toward 69. This would keep more money in trust funds by delaying when people can collect benefits. The trade-off: younger generations would work longer before accessing retirement income. There’s a fairness concern too—life expectancy gains have been unevenly distributed, with wealthier people living significantly longer than lower-income workers. Raising the retirement age would hit lower-income Americans hardest.

Adjusting Cost-of-Living Increases

Most years, Social Security recipients see their checks increase slightly to keep pace with inflation through Cost-of-Living Adjustments (COLAs). The formula might be modified for people born after 1960, resulting in smaller annual increases. While existing retirees might be protected, younger generations could see their benefits gradually lose purchasing power relative to inflation.

Reducing Benefits Directly

The most straightforward but unpopular option would be to simply cut the amount retirees receive. This could involve lowering the benefit formula itself or restricting benefits for higher-income retirees. It’s the most politically difficult solution, which is why other options are typically discussed first.

Which Solution Will Congress Actually Choose?

The path forward remains uncertain. Most experts expect Congress to intervene sometime between now and 2035, likely before any crisis point is reached. However, the chosen solution will likely involve some combination of these options rather than a single dramatic change.

A balanced approach might include modest tax increases paired with a gradual retirement age adjustment and refined cost-of-living calculations. The key is that no single option is politically easy—each involves trade-offs that affect different groups differently.

As Social Security continues approaching its trust fund depletion date, workers and retirees alike need to plan accordingly. For those currently working, considering supplemental retirement savings becomes increasingly important. For those already retired, understanding how potential changes might affect future benefits helps with financial planning.

The system isn’t disappearing, but social security running out of surplus reserves means the program’s structure and generosity will almost certainly evolve. Staying informed about these policy discussions helps individuals make better financial decisions regardless of which solution Congress ultimately adopts.