Social Security Cuts Loom: How to Save $100,000 to Bridge the Gap

Social Security Cuts Loom: How to Save $100,000 to Bridge the Gap

The stability of Social Security presents a significant concern for Americans planning their retirement. According to research from the National Institute for Retirement Security (NIRS), more than half of pre-retirees lack confidence they will receive Social Security benefits equivalent to current retirees. This confidence gap is particularly pronounced among certain demographics—only 31% of Gen Xers and 28% of women feel very confident about receiving full retirement benefits, compared to 52% of boomers and 49% of men who feel very or somewhat confident.

There are legitimate reasons for this concern. The Social Security trust fund faces a critical timeline. By 2033—just 8 years from now—the trust will become insolvent and unable to pay full benefits by 2035. Without intervention, the Social Security program could only deliver approximately 83% of scheduled benefits, funded primarily through ongoing worker contributions.

It is important to understand that Social Security will not disappear completely. Most benefits are funded through current employment tax contributions. As long as workers continue paying these taxes, funding will exist for benefits. The most probable scenario involves reduced Social Security benefits, with recipients receiving only 83% of their full benefit. For context, the average retiree received $1,997.97 in April 2023, and a 17% reduction would result in a loss of nearly $340 monthly—or $4,080 annually.

To compensate for this potential reduction in Social Security benefits, individuals need approximately $100,000 in additional savings. The amount you need to save depends on your age and available timeline.

How Much More You Need to Save for Social Security Gaps

As the Social Security trust fund approaches insolvency without clear solutions, calculating additional required savings becomes crucial for retirement planning.

Analysts at Pension Bee determined that “workers would need to save an additional $100,980, based on the 4% rule.” This figure is particularly concerning given that the median retirement savings for all families is just $87,000, according to the Federal Reserve’s Survey of Consumer Finances.

Pension Bee based their calculations on these assumptions:

• Retirement at age 67 (the full retirement age for anyone born in 1960 or later)
• Annual withdrawals of 4% from retirement savings
• Investments generating a 5% rate of return without accounting for inflation

The required monthly and annual savings vary significantly based on age. Those who are 55 have only a 12-year window and must save an additional $513 monthly to offset potential Social Security benefit cuts. Starting earlier substantially reduces this burden.

Estimated Additional Savings Needed by Age to Offset a 17% Social Security Benefit Cut in 2035

Strategies to Accumulate the Additional $100,980 for Social Security Shortfalls

• Maximize retirement contributions. Utilize catch-up contributions for those over 50 and super catch-up limits for those 60 and over.
• Take full advantage of employer match programs. Secure all available matching funds for your 401(k) and implement auto-escalation features to gradually increase contributions. Consider increasing your contribution percentage with each pay raise.
• Consolidate investment and retirement accounts. Fewer accounts simplify progress tracking and may reduce fees.
• Diversify investments. Proper risk management is essential for both growth and preservation of savings to prepare for potential Social Security reform.

Concerns About Social Security Cross Demographic Lines

The depth of concern regarding Social Security solvency is substantial—a recent study showed that more Americans (64%) fear running out of money in retirement than they fear death, according to the 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement. These concerns have prompted many Americans to file for Social Security benefits earlier than initially planned.

This widespread anxiety likely explains why most Americans across all surveyed categories want Congress to take immediate action rather than delaying addressing the trust fund insolvency. When NIRS asked about agreement with the statement “Congress should act now to shore up Social Security funding rather than waiting another 10 years,” agreement was consistent across demographic groups:

• By sex: men 86%, women 86%
• Political affiliation: Democrats 88%, Republicans 86%, Independents 88%
• By generation: Boomers 93%, Generation X 88%, Millennials 82%
• By annual income: Less than $35k was 89%, between $35k and $74k was 86%, and more than $75k was 88%

The most significant difference appeared among generations, with those nearest to retirement most eager to see Social Security issues addressed promptly. This remarkable consensus on the need for action may finally catalyze meaningful Social Security reform to protect retirement benefits for future generations.