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Social Security benefits are on pace to be slashed sooner than expected, driven by an accelerated timeline for trust fund insolvency that would leave retirees needing up to $138,000 in additional retirement savings to maintain their standards of living, according to a PensionBee Inc. analysis obtained by PLANSPONSOR.
The analysis followed the latest Social Security Administration Board of Trustees report, which revealed the combined Social Security trust funds are now expected to have to start reducing payments to beneficiaries by 2034—one year earlier than previously forecast. The retirement-only fund, the Old-Age and Survivors Insurance Fund, meanwhile, faces depletion even sooner—in 2033. That would trigger a 23% cut to Social Security retirement benefits.
According to the board of trustees’ report, the Social Security Fairness Act—passed by Congress in late 2024 and signed on January 5 by former President Joe Biden—accelerated the depletion of the trust funds by one year.
PensionBee’s founder and CEO, Romi Savova, agrees that the bill, which extended benefits for about 3 million public sector workers—mostly teachers, firefighters, police officers and government employees—came at a cost.
“The decision was essentially Congress choosing to help current retirees, but of course, that may come at the expense of the system’s long-term health,” Savova says.
Social Security’s trust funds have been depleting since 2021, and without congressional action, benefits will have to be cut at some point.
