Jean Chatzky, AARP raise red flag on Social Security growing fears

Many Americans concerned about retirement income understand that the federal government faces a near-term funding problem for Social Security.

In fact, this has been one of the leading issues I’ve discovered is on people’s minds during my years reporting on Americans’ personal finance worries.

That’s because, without legislative action, the trust funds that help pay for millions of Americans’ Social Security monthly paychecks are expected to run dry in 2034 — a mere 8 years away — according to the Social Security Administration (SSA).

That would result in a decline in retirees’ expected monthly paycheck amounts.

“At that time, the projected fund’s reserves would become depleted, and continuing total fund income would be sufficient to pay 81 percent of scheduled benefits,” the SSA wrote.

A 2025 survey found that only 36% of Americans were confident in the Social Security trust funds’ future, down from 43% in 2020, according to AARP.

“These fears are not new. But I do think they are growing,” former NBC “Today” show financial editor Jean Chatzky told USA Today.

AARP explains Social Security solvency options

Americans qualify for Social Security through decades of work and payroll contributions.

The program delivers benefits to retired workers and their families, to the spouses and dependents of deceased workers, and to individuals who can no longer work because of a severe disability, along with their households.

Its funding comes primarily from dedicated payroll taxes paid by nearly all U.S. workers. For many years leading up to 2021, those tax revenues exceeded benefit payments, allowing the system to build substantial reserves in its trust funds.

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As the large baby‑boomer generation moves into retirement and the number of beneficiaries climbs, those reserves are now being drawn down to help cover full benefit payments — a shift that underlies today’s financial strain on the program.

“Congress must act to make sure Social Security can pay the full benefits Americans have earned and determine a path forward to address the program’s long-term fiscal challenges,” wrote AARP. “Any proposed solution could contain many modifications to the program.”

AARP offers the following legislative suggestions to help address Social Security’s impending funding shortfall:

Changing the wage capSocial Security taxes apply only to the first $176,100 of earnings in 2025, and income above that taxable maximum is not subject to payroll tax.The taxable maximum increases each year based on national wage growth.Several proposals would either remove the cap entirely or raise it to capture more high‑end wage growth.Most of these proposals would also increase benefits for higher earners, though the added contributions would yield a lower rate of return.
(Source: AARP)
Increasing the payroll tax rateWorkers and employers each pay a 6.2% payroll tax on wages up to $176,100, while self‑employed workers pay the full 12.4%.One option to reduce the funding gap is to gradually raise the payroll tax rate for both employees and employers.
(Source: AARP)
Adding new funding sourcesSocial Security is currently financed only through the 6.2% payroll tax on workers and employers, with self‑employed workers paying 12.4%.Congress could choose to use general federal revenues to help pay benefits.Lawmakers could broaden the tax base by applying Social Security taxes to other forms of income, such as investment income.Another option would be to create an investment fund that could place assets in private markets and use long‑term returns to support benefits, potentially financed initially through borrowing.
(Source: AARP)
Raising the full retirement ageThe full retirement age is 67 for people born in 1960 or later, and some proposals would raise it to 68, 69, or 70.Most proposals would phase in the change gradually to avoid affecting people who are already at or near retirement.The minimum claiming age of 62 would remain in place to protect workers with physically demanding jobs or health or caregiving challenges.Each one‑year increase in the full retirement age reduces benefits for people claiming at 62 by roughly 6%, and long phase‑ins mean savings would take decades to materialize.
(Source: AARP)
Reducing benefits for higher‑income householdsSocial Security currently replaces a larger share of lifetime earnings for lower‑wage workers than for higher earners.Some proposals would adjust the benefit formula so higher earners receive proportionally smaller benefits.Another approach would be means testing, which would reduce benefits for retirees with higher income or assets.
(Source: AARP)

Jean Chatzky and AARP urge Americans to understand the ramifications of Social Security solvency.

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Jean Chatzy discusses when to begin collecting Social Security

Amid all this discussion, Chatzky still recommends calm and rational decision-making when it comes to deciding when to start receiving Social Security benefits.

“The numbers of people filing for Social Security earlier have gone up because there is a lot of fear and uncertainty, but you need to be very careful before you do this,” Chatzky said.

“I would caution you to try to wait because for every year you wait to claim your benefits from age 62 to age 70, you typically get a bump in those benefits of about 8% a year,” she continued. “That’s a return that’s difficult to beat in any other way.”

“This is a decision that has ramifications that will last for a very, very long time. You should be asking yourself whether you actually need this money right now or whether you can allow your benefit to continue to grow.”

Related: Dave Ramsey sounds alarm on Social Security, 401(k)s

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