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- Social Security benefits could face cuts by 2033. Here's how to plan for the worst-case scenario.</p>
<p>Robert PowellJuly 17, 2025 at 4:00 AM</p>
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<p>The Social Security trust fund could be depleted by early 2033, triggering 23% across-the-board benefit cuts for all recipients. This sobering reality from the latest trustees report has retirement experts sounding the alarm about the need for immediate action and creative solutions.</p>
<p>Marcia Mantell, president of Mantell Retirement Consulting, recently discussed the implications of the 2025 Social Security trustees report on the "Decoding Retirement" podcast, providing actionable advice for Americans facing this potential crisis.</p>
<p>The trustees report, released in mid-June, painted a concerning picture of Social Security's financial health. While the depletion date for the Old Age and Survivors Insurance (OASI) fund remained at 2033 — consistent with last year's projection — the timeline has actually accelerated.</p>
<p>"Instead of the end of 2033 depleting the reserve account, it's now the beginning of 2033," Mantell explained. "So it's a problem."</p>
<p>The acceleration stems from several factors, including the Social Security Fairness Act, which restored benefits to previously excluded government workers; declining fertility rates; and a worsening worker-to-retiree ratio. Currently, fewer than three workers support each beneficiary, down from more than five workers per beneficiary in 1960.</p>
<p>The crisis extends beyond Social Security. The Medicare Part A trust fund, which covers hospital insurance, is now projected to be depleted by 2033 — three years earlier than previously forecast.</p>
<p>"I was surprised, though, on the Medicare side that the Part A ... is projected to be depleted," Mantell said. "The reserve account [is] to be depleted three years earlier, also in 2033."</p>
<p>She noted that healthcare expenses typically rise at about twice the rate of general inflation, making the Medicare trust fund particularly vulnerable. However, she expressed optimism about Medicare's Innovation Center, which "continually look[s] for innovative ways to help with both quality of care and pricing."</p>
<p>The $20,000 question</p>
<p>To illustrate the potential devastation, Mantell highlighted some scenarios for different income levels.</p>
<p>For instance, a couple where both spouses earned high wages throughout their careers and delayed claiming until age 70 would see an annual benefit of $89,000 before cuts. But after a 23% reduction, they would receive an annual benefit of $68,000 — an annual loss of $20,000.</p>
<p>"It's bad enough that your guaranteed benefit from Social Security would be cut," Mantell said. "But my bigger issue is, where do you get it from? Even if you have a fairly healthy retirement account, do you want to spend an extra $20,000 a year?"</p>
<p>For younger workers, the long-term impact is even more staggering.</p>
<p>A 20-year-old earning $100,000 today could face a net present value loss of $800,000 over their lifetime if they retire at 70. Net present value represents the current value of a stream of future income, discounted to reflect the time value of money.</p>
<p>The potential modification of the Affordable Care Act could compound these problems, with an estimated 8 million people potentially losing ACA coverage and another 8 million facing Medicaid cuts.</p>
<p>Mantell describes this as "catastrophic" because it places the entire burden on "regular hardworking consumers to figure this stuff out" while policymakers struggle to find solutions.</p>
<p>Actionable strategies for current workers and pre-retirees</p>
<p>Given the potential cuts, how should individuals plan for this worst-case scenario?</p>
<p>Mantell advised "planning much earlier" and saving more if you can, particularly if you're in your 20s.</p>
<p>"That's your best decade to save for retirement," Mantell said. "So get saving, kids. I mean, you've really got to own this."</p>
<p>Another tip is to start retirement income planning by age 50 and plan for higher withdrawal rates from retirement accounts to compensate for reduced Social Security.</p>
<p>A man walks to a US Social Security Administration office on June 30 in Mount Prospect, Ill. (AP Photo/Nam Y. Huh) ()</p>
<p>Additionally, you can eliminate zeros from your earnings record by continuing to work or increasing your income.</p>
<p>"I believe you can never save enough," Mantell noted. "Saving more is super important. It gives you lots of flexibility, but ... not everyone can do that."</p>
<p>For those who cannot increase savings significantly, she emphasized understanding how potential cuts could affect their specific situation.</p>
<p>Thinking beyond traditional Social Security solutions</p>
<p>Mantell also advocated for innovative policy solutions rather than accepting conventional approaches of simply raising taxes or cutting benefits.</p>
<p>"We are not being nearly creative enough when we only offer two choices," Mantell said. "Let's be way more creative."</p>
<p>She questioned whether the system could use different benefit calculation formulas — perhaps one for workers in physically demanding jobs who may need to retire early versus those in white-collar positions, or separate formulas based on income levels.</p>
<p>The current "straightforward" solutions proposed by the Social Security Administration — raising revenue by one-third or cutting benefits by one-fourth — are what Mantell calls "draconian" and "not tenable for regular normal people."</p>
<p>On the Medicare side, Mantell sees promise in existing innovation efforts:</p>
<p>"There's also this really cool thing at CMS, the Centers for Medicare and Medicaid Services, called the Innovation Center," she said. "And they continually look for innovative ways to help with both quality of care and pricing. So I would like to think they're [going to] be really busy for the next five to eight years trying to look at new ways to sort of skin this cat."</p>
<p>The bottom line</p>
<p>The Social Security and Medicare crisis is no longer a distant threat — it's a looming reality requiring immediate attention from both policymakers and individual Americans. While the challenges are significant, they're not insurmountable if addressed with creativity, urgency, and shared responsibility.</p>
<p>"We deserve a secure retirement," Mantell said. "We just don't deserve a superrich retirement unless we've done it on our own."</p>
<p>For Americans approaching or in retirement, the message is clear: Hope for the best policy outcomes, but plan for the worst-case scenario. The time for complacency has passed, and the time for action is now.</p>
<p>Got questions about retirement? Email Robert Powell at [email protected], and we'll answer them in future episodes.</p>
<p>Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.</p>
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