Should the middle class really worry about the situation of social security? Expert weight
Social Security is one of the most widely used and misunderstood government programs in the United States. As the title warns of funding shortages and political impasses, middle-class retirees and retirees under 55 are wondering if the federal safety net program will be there when needed.
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Gobankingrates spoke with experts to find out whether the middle class should really be concerned about the social security situation.
Social security remains the cornerstone of retirement plans for millions of Americans. However, its financial base is increasing. The program's trust funds are expected to run out by 2035.
“This doesn't mean Social Security is gone completely, nor does it run out of money,” said Shawn Dubravac, an economist at the Avrio Institute. “It means the program no longer has enough funds to pay the scheduled benefits.”
This looming shortage is largely due to population changes, such as the retirement and life expectancy of baby boomers, which leads to a higher beneficiary-to-worker ratio. In 2024, the Social Security Agency paid nearly $1.5 trillion in benefits to more than 72 million beneficiaries, highlighting the wide impact of the program.
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“If no changes are made, Social Security payments will rely solely on incoming payroll taxes, which are expected to cover only 77% of planned benefits,” Dublawak said. “So Social Security is not running out of money, but benefits can be cut unless action is taken.”
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Middle-class Americans should worry about the potential of lowering benefits, retirement age or higher taxes.
The reduced benefits may mean that retirees earn 20%-25% less than expected, which is especially unstable for those without pensions or substantial savings. Retirement age delays may require people to work longer than planned, possibly in the 1960s or late 1970s, while higher payroll taxes may shrink in the highest income year.
“The middle class should worry about lowering future welfare, especially as Congress delays reforms,” Dublawak said. “Some parts of the middle class may make money and cannot qualify for demand-based programs, but there is little to have enough self-funded retirement. These families will feel the most squeeze.”
