Social Security Trustees Report 2025

Social Security 2025 Trustees Report Released

On June 18, 2025, the Social Security Administration released the 2025 Trustees Report. According to the report's projections, if no changes are made to the program, it will need to reduce benefits in 2033, paying out about 77 cents for each dollar of projected benefits. While benefits would continue to be paid, changes will need to be made to avoid these future cuts and keep the program on solid financial footing.

Social Security can be fixed

Given the popularity of the program and importance of this income stream to seniors, we do believe action will be taken in the future to preserve benefits. There are several potential solutions that could be implemented to shore up the program's finances, like removing the earnings ceiling for Social Security taxes, increasing the tax rate, or raising the age for eligibility or full retirement. As an example, the Social Security Board of Trustees estimates that raising the combined payroll tax from 12.4% to 16.05% would fully fund the program through at least 2099. That said, these aren't easy decisions to make, so while we believe action will be taken, we believe it's unlikely to happen until 2033 is more imminent. 

Focus on what you can control

Until we have greater clarity, we encourage you to focus on the things you can control – how much you save for retirement and when you claim your Social Security benefit. 

Social Security was never intended to be the sole source of income in retirement. According to the Trustees report, Social Security benefits replace about 40% of pre-retirement income for a median earner who claims at full retirement age. For individuals earning below median, that percentage is higher; for individuals earning above median, that percentage is lower. So, the more someone earns, the more they'll have to save on their own to maintain their lifestyle in retirement.

While many may claim their benefit early because they need it, we recommend against taking benefits early based on worries about the long-term health of the program. Social Security payments can be sharply and permanently reduced by as much as 30% if taken before a full retirement age of 67. With future cost-of-living adjustments based on this lower amount and retirement potentially lasting 25 years or more, this initial reduction can have a profound effect on your retirement income stream. Additionally, your selections don’t just affect you; they can have a permanent effect on the benefit received by your surviving spouse. 

Be sure you understand the long-term effects of your decision before you begin taking Social Security. Your financial advisor can help you estimate the impact different claiming ages may have on your goals. If concerned about a future reduction in benefits, they can also run scenarios with a reduced benefit amount to help you understand the potential impact as well as strategies to mitigate the risk.