For nearly 90 years, millions of Americans have been receiving Social Security retirement benefits in one form or another, to the tune of $11.3 trillion. In 2023 alone, 53 million retirees got a check each month.

Even with its reach and longevity, Social Security faces some challenges that may affect how you’re thinking about and planning for retirement—no matter how close or how far away you are. Here’s what to consider about what Social Security may look like in your retirement.

How Social Security works today

If you’re currently employed, you’ll see Social Security, or FICA (Federal Insurance Contributions Act), deductions on your paystub. Those deductions are paid out to people who are currently eligible to receive Social Security benefits.

Today, 97% of older adults are eligible, including a significant portion of the population who hasn’t been able to supplement expected Social Security benefits with their own retirement savings. In fact, about 27% of people age 59 and older haven’t saved anything for retirement. Social Security keeps 4 in 10 adults age 65 and older above the poverty line.

The challenges facing Social Security

It’s a misconception that Social Security was intended to replace all a person’s income in retirement; it wasn’t. What’s called the income replacement rate was originally about 40% for Social Security;  today it’s about 37%.

Simultaneously, and in a bit of good news, life expectancy has also increased. If retirement is longer, you (and everyone else) may need more money to pay for more post-work years. Finally—and this is important—the number of people nearing or already claiming Social Security is at a historic level. In 2024, more Americans will turn age 65 than at any other point in history, an inflection some researchers refer to as Peak 65.

How Social Security may be different when you retire

If there are more people working than drawing benefits, Social Security can sustain the existing level of benefits. But if the equation flips—as it’s about to do because of Peak 65—there may not be enough people actively employed to pay the current level of benefits.

Many people often refer to Social Security as going bankrupt; that’s not true. What is true is that sometime around 2037, the level of benefits and the age at which Social Security pays them would be unsustainable, given the forecasted number of workers and payees. At that point, barring any changes in how the program is set up, benefits would have to change—either the level provided or the age at which you’re eligible to receive them. The U.S. Congress decides funding, and that legislative body would have to address any shortfalls.

What you can do to prepare in case Social Security benefits change

Knowing that Social Security benefit levels and retirement age may be uncertain just requires planning. Yes, Social Security probably will still be around when you retire, but it might pay you less—so your goal right now is to save as much as you can for as long as you can.

If you’re near retirement—say, over age 55:

• Think about the age you plan to claim Social Security. Benefits increase significantly if you delay from 62 to 67 or 70.
• Take advantage of catch up contributions, or work just a little longer, if you can. More and more people are phasing into retirement—working part time, for example, to delay drawing fully on retirement income sources.

If you have more time until retirement—say, you’re under age 55:

• Dig deep into how much you’re saving. For example, if your employer provides a 401(k), are you enrolled? (Some plans have what’s called auto enrollment; some do not—and in that case, you have to elect to enroll.) The best way to check is through either your HR department. Remember: Saving something, even just a little as you start, helps.
• Get your employer match. If you do have a 401(k) and your employer offers a match, save enough to get the full amount.
• Add to savings as you’re able. Could you increase your contributions by 1% a year? If not, can you save in either an individual retirement account (IRA) or Roth IRA?