The Social Security Trustees released their latest report on June 18, 2025, and while the headlines may sound concerning, the underlying message is more nuanced. The Old-Age and Survivors Insurance (OASI) trust fund is now projected to run out in 2033, unchanged from last year. When combined with the Disability Insurance (DI) fund, the projected depletion date moves up slightly to 2034. This means that without legislative reform, Social Security would only be able to pay about 81% of scheduled benefits starting that year.
Medicare’s Hospital Insurance trust fund is facing its own pressure, with reserves expected to be exhausted in 2033—three years earlier than previously forecast—due in part to rising healthcare costs. In addition, recent legislation, including the Social Security Fairness Act passed in early 2025, expanded certain benefits and increased long-term costs, contributing to the more pessimistic projections.
Despite the term “depletion,” Social Security is not going away. Even if the trust fund reserves are exhausted, benefits will continue to be paid—just at reduced levels based on incoming payroll taxes. That’s an important distinction for retirees and future beneficiaries alike.
From a financial planning perspective, this is not a new challenge. It’s something we’ve already built into our retirement models for years. At Sugden Wealth Management, we stress-test retirement plans for younger clients using a 25% reduction in Social Security benefits to account for potential future shortfalls. Rather than waiting to see how Washington responds, we take a proactive approach.
That includes evaluating different claiming strategies, incorporating delay options, and coordinating withdrawals from taxable and tax-deferred accounts to optimize your retirement income. It also means helping you build diversified income sources that don’t rely solely on Social Security.
The latest report simply reinforces what we’ve known for some time: while Social Security is a vital part of retirement income, it shouldn’t be the only part. With proper planning, flexibility, and ongoing guidance, you can be well-positioned no matter what happens in the years ahead.
If you’d like to revisit your plan in light of this year’s report, or if you’re wondering how future changes could affect your retirement timeline, let’s talk. We’re here to help you stay prepared and confident.
