More American workers and retirees agree that the financial outlook for their golden years is getting worse, according to major media reports. Only 64 percent of people are confident they have the funds to live a comfortable retirement, down six points from a year ago. Around half of workers and 40 percent of retirees believe Social Security will not continue to provide benefits of equal value in the future.
The U.S. Social Security system will be severely depleted by 2032, the Congressional Budget Office projects, but the Social Security Board of Trustees estimates in a June 2025 report that fund reserves will last for full payments only through 2033. This depletion date is three quarters earlier than the previous year's forecast showed. After reserve depletion, payments could drop by as much as 20 to 25 percent, according to Nick St. George. Benefits will continue to be payable after reserve depletion, but not in full unless legislative action is taken, the American Academy of Actuaries states. Retirees after 2033 will get 77 percent of their full benefits, while the disability fund is estimated to manage full payments until 2034, when 81 percent of benefits can be paid out.
Healthcare costs are further straining retirement savings and Social Security payments. Nearly 60 percent of workers say health care costs are limiting their ability to save for retirement, and about 40 percent of retirees say their health care expenses are higher than what they anticipated. The average retiree will spend $172,500 on healthcare costs during their golden years, according to KFF. Medicare premiums can gobble up as much as one-fourth of a retiree’s Social Security payments, KFF reports.
Demographic and funding structure challenges compound these issues. In 1960, there were 5.1 workers per Social Security recipient; by 2024, that number had dropped to 2.7. Social Security is funded through payroll taxes where employees and employers each pay 6.2 percent, totaling 12.4 percent. Self-employed individuals pay the full amount themselves. In 2025, the tax applies to incomes up to $176,100.