Social Security: What the Latest Report Says and What It Could Mean for Your Retirement

This week, the Social Security Board of Trustees released its annual report, and the big headline is this: the trust fund Social Security relies on to pay full retirement benefits is projected to run out in 2033. That estimate hasn’t changed from last year, but it continues to raise questions—and anxiety—for many Americans.

So what does it actually mean for Social Security to "run out of money"?

Understanding the Trust Fund, and What Happens When It’s Depleted

Social Security is funded in two main ways:

Ongoing payroll taxes—the 6.2% you pay out of every paycheck (and that your employer matches) go directly into the system to pay current retirees.
The Social Security trust fund—a reserve built up over time to cover shortfalls when payroll tax revenue isn’t enough.

That trust fund is what’s projected to be depleted by 2033. If that happens and Congress doesn’t act, Social Security would still continue, but with reduced benefits, because only incoming payroll taxes would be available to pay retirees. As of now, that would cover roughly 77% of promised benefits.

What a Reduction Might Actually Look Like

There’s no official plan yet for what a cut in benefits would look like, but many experts believe that—rather than across-the-board cuts—it could resemble the Medicare surcharge system, where higher-income retirees receive reduced benefits or pay more out of pocket.

In other words, it may not affect everyone equally—and it may not affect you at all, depending on your age, income, and when (or whether) changes are implemented.

What You Can Do: Plan Ahead

Social Security can be confusing, and it’s hard to feel confident about retirement when you’re unsure how much you’ll be able to count on, or whether you’ll need to rely on it at all.

That’s where we come in.

At Hanover, we help clients take the uncertainty out of the equation. Through thoughtful retirement planning, we can:

Help you understand how Social Security fits into your broader financial picture
Model different benefit scenarios and timing strategies
Build a plan that works whether benefits change or stay the same

If you’re concerned about what the future of Social Security means for your retirement, we’re here to help you make a plan that gives you clarity and confidence.

Let’s talk about what retirement looks like for you, regardless of any changes Social Security may face.