Retirement Social Security

Some Social Security Recipients Could Lose $16,900 a Year in Benefits

Social Security cuts won't necessarily impact all retirees in the same way.

By Maurie Backman , Edited by Laura Hohenstein

Updated Sept. 22, 2026

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Social Security serves as a major source of income for many retirees today. And many people's retirement plans revolve around getting those benefits in full.

The problem is that Social Security is facing some big financial challenges in the coming years that could result in benefit cuts. And those cuts may not affect all retirees in the same way.

Here's why Social Security is facing broad cuts, what those cuts might look like for different groups of retirees, and how working Americans today can take steps to prepare.

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Why Social Security faces sweeping cuts

Rumors have been flying for years that Social Security is on the verge of bankruptcy. But thankfully, Social Security cannot run out of money since the program is funded primarily by payroll taxes.

However, in the coming years, the labor force is expected to shrink due to factors like declining birth rates. At the same time, the number of older Americans who are expected to retire and file for Social Security benefits is growing.

As a result, Social Security does not expect to take in enough payroll tax revenue to keep up with benefits in full. Once the program's Old-Age and Survivors Insurance Trust Fund runs dry, which is expected to happen in late 2032, Social Security may have to cut benefits by 22%, according to the program's Trustees.

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Social Security cuts could hurt retirees in different ways

The good news in all of this is that Congress has never allowed Social Security in its history to cut benefits. So there's a good chance cuts will be avoidable this time around, too.

Still, it's important for workers today, and especially near-retirees, to plan for potential Social Security cuts. And the Committee for a Responsible Federal Budget (CRFB) warns that some retirees could lose a lot of money if Social Security is unable to keep up with benefit payments in full.

The CRFB specifically says that the typical newly retired dual-earning couple with a medium income could lose up to $16,900 in annual benefits if lawmakers don't prevent Social Security cuts. For a couple with a high income, the loss in Social Security benefits could be $22,300 per year.

For lower-earning couples, the hit isn't as bad on a dollar basis at just $10,200. But a loss of $10,200 in Social Security also means that lower-earning couples face a larger reduction in retirement income on a percentage basis, which might sting more than the hit medium and higher earners face.

Medium earners, and especially higher ones, are typically more likely to have retirement savings, investments, or other income to fall back on outside of Social Security. So while they might lose out on more Social Security dollars, they may also fare a lot better.

There's a looming threat to senior healthcare, too

As if Social Security cuts weren't bad enough, making matters worse is that the Medicare Hospital Insurance trust fund is projected to become insolvent in 2033. At that point, Medicare spending could be reduced by 11%, thereby potentially reducing healthcare services for seniors at a time when they may also be facing a large reduction to their Social Security checks.

The reason Medicare faces potential cuts is the same as Social Security. Both programs get funded with payroll taxes, and a shrinking labor force puts both programs at risk.

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Near-retirees can't afford to be complacent

While Social Security cuts are a threat to all workers, those who are nearing retirement may face the biggest problems. That's because near-retirees may have less opportunity to boost savings to make up for reduced benefits.

In fact, today's 61-year-olds are set to reach full retirement age (FRA) for Social Security in 2032, which is when they should, in theory, be eligible to collect their monthly benefits without a reduction. But while waiting for FRA avoids a reduction in benefits due to filing early, if Social Security has to cut benefits across the board, those entering retirement may have a world of financial stress on their hands.

Bottom line

Social Security is one of the most important benefits for seniors today. But the reality is that the program needs a financial lifeline. And if Congress doesn't intervene before the program's trust fund runs dry, Social Security may have to reduce benefits.

If you're in the process of planning for your retirement, you may want to factor in a 22% Social Security cut to play it safe and understand exactly what that means for you. Go to SSA.gov and create an account to access your most recent earnings statement, which should include an estimate of your future Social Security benefit. Then, reduce that amount by 22% to see what it leaves you with.

If you can find a way to cover your expenses in retirement even with a 22% reduction in your Social Security checks, you can breathe easier. But it's important to do this exercise well ahead of retirement so you have time to pivot and increase savings in case Congress doesn't manage to come to the rescue.

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