The Social Security Funding Gap and What You Need to Do About It
September 18, 2026
You’ve heard it in the news—Social Security funds are “running out.”
Recently, the Social Security and Medicare Trustees released their 2026 report, and the findings aren’t exactly encouraging. To summarize, the trust fund used to pay for retirement and survivor benefits is projected to be depleted just six years from now.
You may be wondering what that means for your future.
Will the money be there when you need to claim Social Security? Is Social Security simply going to… disappear? What is Congress going to do about it?
“Depleted funds” sounds like a last call for Social Security benefits, but the reality of the situation isn’t as straightforward—or as bleak—as it may seem.
You can’t get rid of Social Security that easily
First things first: a depleted trust fund does not automatically equal a complete lack of funds. Social Security is primarily funded through current employees’ and employers’ payroll taxes. So even if the trust fund itself is drained, those taxes will continue to be paid, covering about 78 percent of scheduled benefits.[1]
So Social Security wouldn’t disappear completely, but it wouldn’t be able to fulfill its current benefit obligations. And while a reduction in benefits isn’t ideal, it’s better than nothing.
Right?
Even still, that may not be the reality we have to live with.
We’ve been here before
As with many of our nation’s financial catastrophes, this isn’t the first time this has happened.
In the early 1980s, Social Security had the same crisis—the program was projected to fall short of its benefit obligations.
And what happened?
Congress ultimately passed a package of changes that gradually increased the full retirement age from 65 to 67, accelerated scheduled payroll tax increases, and made some Social Security benefits taxable. Those changes didn’t happen overnight, but together they helped address the immediate funding crisis and significantly improved Social Security’s long-term financial outlook.
For the next 40 years or so, at least.
Now, here we are again. The Old-Age and Survivors Insurance (OASI) Trust Fund (the one used to fund Social Security) is running out, and Congress needs to decide how to address the funding shortfall. There are options, though none of them are particularly attractive to voters, so it looks like Congress will again delay a decision as long as possible.
They’ve proposed raising or eliminating the wage base limit. (Currently, employees and employers are only taxed on up to $184,500 of income per year for Social Security[2]; there are talks of raising or eliminating that threshold.) Other options include increasing payroll taxes, modifying benefits, or gradually increasing the retirement age. There could also be some combination of these changes.
Whatever Congress decides, it’s very likely that Social Security won’t look the same in the next few decades, and that’s something for younger investors to keep in mind as they plan.
Should I claim Social Security before it’s gone?
If you’re nearing retirement, you might still be worried about the lack of Social Security funds and feel tempted to draw your benefits early. But when deciding the best time to claim, it’s important to consider a variety of factors—not just what the headlines are saying. Headlines rarely paint the full picture; plus, they tend to incite emotional decisions, and those decisions rarely serve your best interest.
So instead of, “Should I claim Social Security before it’s gone?” here’s what you need to be asking:
How long am I likely to live?
Longevity is one of the most important factors when deciding when to claim Social Security. If you’re healthy and have a family history of longevity, then waiting to claim Social Security will likely serve you best. You’ll have a larger monthly benefit to serve as a cushion against inflation if you live into your 90s or even 100s.
Conversely, if your health or family history leads you to believe your retirement won’t be an especially long season, it might make sense for you to claim benefits earlier.
Could my other assets support my lifestyle?
If you have a healthy investment portfolio and your current income can support you for several years while you delay Social Security, it might make sense to do so, so your benefits can continue growing.
How will Social Security impact my tax picture?
Delaying Social Security may create an opportunity to draw from retirement accounts or consider strategies such as Roth conversions during years when your taxable income may be lower.
Do I plan to keep working?
If you’re caught in the “use it or lose it” mindset, you might be tempted to draw Social Security while you’re still making a healthy salary. Even though you don’t need the money, you could invest it, right? But claiming Social Security before full retirement age (67 if you were born in 1960 or later) while you’re still working may result in some benefits being temporarily withheld if your earnings exceed applicable limits. At full retirement age, Social Security recalculates your benefit to account for months when benefits were withheld.
How will my spouse’s income impact our benefits?
If you’re married and one of you has a significantly higher benefit, it may make sense for the higher earner to delay claiming, potentially all the way to age 70. Delaying can increase that spouse’s monthly benefit and may also provide a larger survivor benefit for the other spouse.
Looking at the Bigger Picture
When it comes to claiming Social Security, the risk you’re fighting isn’t a diminishing trust fund. It’s your longevity. How can you make sure you don’t run out of money when you need it? That question requires the consideration of multiple factors that are unique to you—not just “What can I get before the money is gone?” (And again, it’s not likely to disappear completely any time soon.)
If you want to determine how Social Security fits into your broader financial picture, we’d love to help. You can schedule a consultation with our team here.
