Chris Orestis, founder & president of Retirement Genius, answers the question: “Is Social Security going bankrupt?” 

“If we don’t address the financial shortfall… it would trigger an immediate 20% or greater benefit cut.”

That statement tends to stop people in their tracks.

It also fuels one of the most common fears I hear from clients:

“Is Social Security going to run out?”

In this conversation with Chris Orestis, we tackled that question head-on—and the answer is more nuanced than most headlines suggest.

One of the biggest misconceptions is that Social Security will simply disappear.

That’s not what’s happening.

As Chris explained, the issue isn’t that the entire system goes bankrupt. The concern is that the trust fund portion of Social Security funding could become insolvent within the next decade if no action is taken.

And if that happens?

Benefits could be reduced by roughly 20% across the board.

That’s a meaningful change—but it’s very different from “gone.”

Understanding that distinction is critical, because fear often leads to poor decisions.

At its core, Social Security is a math problem.

Today’s system relies heavily on current workers funding current retirees. It takes roughly three workers paying into the system for every one person receiving benefits.

As the population ages and workforce dynamics shift, that balance is being strained.

Fewer workers per retiree means less funding relative to the benefits being paid out.

That’s what creates the pressure on the system.

While the math is straightforward, the solution is not.

Chris described Social Security as the “third rail” of politics—something policymakers are reluctant to touch.

But there’s an important reality here:

The impact of doing nothing would be too large to ignore.

A sudden 20%+ reduction in benefits wouldn’t just affect retirees. It would ripple through the entire economy.

That’s why, historically, these issues get addressed—often later than ideal, but before catastrophic outcomes occur.

Fixing the system will likely require a combination of adjustments.

As Chris outlined, those could include:

In other words, it won’t be one lever.

It will be several.

And importantly, those changes are unlikely to impact people who are already very close to retirement in the same way they might affect younger generations.

One of the most important takeaways from this conversation is what not to do.

Recently, there has been a noticeable increase in people claiming Social Security at age 62—not because it’s the optimal strategy, but because they’re afraid the system won’t be there later.

That’s a dangerous mindset.

As Chris made clear, Social Security is not disappearing. And making a permanent decision based on fear can significantly reduce your lifetime income.

In many cases, waiting increases your benefit substantially—sometimes close to doubling between age 62 and 70.

That’s not a decision you want to rush.

Rather than reacting to headlines or political noise, the better approach is to focus on what you can control.

If you’re within 3–5 years of claiming Social Security, the system is likely to look very similar to what it does today.

If you’re further out, it’s reasonable to assume that changes could happen—but those changes will likely be phased in over time.

In the Retire Today framework, Social Security falls under the MAKE step—your income.

But that decision connects to everything else:

That’s why it’s so important to get it right.

Social Security isn’t going away.

But it isn’t standing still either.

Don’t make a permanent mistake with your Social Security decisions because of fear or insufficient information.

Because when it comes to retirement, clarity beats reaction every time.

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About the Author:

Jeremy Keil, CFP®, CFA is a retirement financial advisor with Keil Financial Partners, author of Retire Today: Create Your Retirement Income Plan in 5 Simple Steps, and host of the Retirement Today blog and podcast, as well as the Mr. Retirement YouTube channel.

Jeremy is a contributor to Kiplinger and is frequently cited in publications like the Wall Street Journal and New York Times.

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