Social Security trust fund drains faster here’s how seniors can prepare for cuts

Social Security's financial troubles are getting worse, with the program now expected to face insolvency a year earlier than previously thought, according to CBS News reporting on the latest developments. This means that starting in 2033, Social Security may only be able to pay 77% of expected benefits to retirees who depend on these payments. The situation has become more urgent because of ongoing problems with Social Security overpayments that might need to be paid back, leaving many seniors in a difficult financial position.

Options for seniors who currently need money

With retirement savings becoming rare and pensions almost disappearing, older Americans are looking for ways to make up for the income they might lose. CBS News experts suggest three main options for seniors who need extra money now: 

1. Reverse mortgages
2. Annuities
3. Personal loans

A reverse mortgage lets home owners aged 62 and older get monthly payments from their home's value, which only needs to be repaid when the house is sold or the owner dies, CBS says. On the other hand, annuities provide guaranteed monthly payments for life in exchange for a lump sum payment upfront.

Why is Society Security being affected? 

The 2025 Trustees Report has confirmed these concerning projections, with Yahoo Finance analysis showing that the program's trust fund reserves will run dry by 2033. When this happens, Social Security will face a 23% cut in benefits, which retirement advisor Marcia Mantell describes as a devastating blow rather than a small reduction. For a couple receiving maximum benefits of $89,000 annually, this would mean losing $20,000 per year, dropping their income to just $68,000.

The problem stems from declining birth rates in America, Yahoo Finance says, which means fewer young workers are paying into the system to support current retirees. Currently, there are only about 2.5 workers supporting each retiree, compared to higher ratios in the past. Yahoo Finance experts warn that this creates a double problem for retirees: they receive less guaranteed income from Social Security while also needing to withdraw more money from their personal retirement accounts to make ends meet. The Medicare situation is equally troubling, with the hospital insurance trust fund also projected to run out of money by 2033, three years earlier than previously expected.

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How seniors can prepare for potential benefit cuts

For seniors already retired, the options to prepare for potential benefit cuts are limited but important, as outlined in AOL's coverage of practical solutions. The first step involves carefully reviewing all expenses to find areas where money can be saved, such as choosing lower-cost Medicare plans or canceling unused subscriptions and services. Creating a detailed budget helps retirees understand exactly where their money goes each month and identify potential savings.

Another option is returning to work, even part-time, though this can be challenging for older adults depending on their health and physical abilities. The gig economy offers flexible opportunities that might work better for seniors than traditional jobs. 

AOL financial experts also recommend considering downsizing to a smaller home, which can free up valuable equity while reducing ongoing costs like property taxes, insurance, and utilities. For example, selling a $300,000 home and buying a $200,000 replacement could provide $100,000 in cash to help weather reduced Social Security payments. While lawmakers still have options to prevent benefit cuts, including raising payroll taxes or adjusting the benefit formula, seniors should prepare for the possibility that their monthly checks could shrink significantly within the next eight years.