Social Security Warning: Advisers Sound Alarm on Potential Benefit Cuts
Concerns over Social Security’s long-term financial health are driving a growing number of Americans to claim retirement benefits early, according to a new industry survey.
The poll by the National Association of Registered Social Security Analysts (NARSSA) highlights widespread anxiety among retirees and near-retirees over potential benefit reductions. While financial advisers warn that claiming early permanently lowers monthly payouts, 73.5 percent of surveyed professionals reported that client fears of future cuts are motivating them to file early.
“Claiming early simply to beat a future cut can backfire,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “You’re voluntarily locking in a smaller monthly benefit today because you’re afraid Congress might reduce benefits years from now.”
Why It Matters
More than 70 million Americans receive Social Security benefits, making the program a critical source of income for retirees and people with disabilities.
If Congress does not act before the Social Security retirement trust fund is depleted, benefits could face automatic reductions. According to the 2026 Social Security Trustees Report, the retirement trust fund could be exhausted in the fourth quarter of 2032. At that point, recipients could experience across-the-board benefit cuts of about 22 percent.
This looming deadline has heightened anxiety among future beneficiaries, many of whom are rushing to secure payments now out of fear that they will otherwise miss out entirely.
Confusion and Client Concerns
The August survey of 189 advisers found that nearly 59 percent of respondents believe their clients doubt Congress will successfully resolve the program’s financial shortfalls.
Confusion compounds the issue. Approximately 62 percent of advisers said clients feel overwhelmed by conflicting claiming strategies, and 45 percent noted that clients are simply searching for a definitive answer on the optimal age to begin collecting.
Workers can begin collecting retirement benefits as early as age 62, but doing so permanently decreases monthly checks compared to waiting until full retirement age, which ranges from 66 to 67 depending on birth year.
“Making the decision of when to claim Social Security has always been part art, part science. Unfortunately, it is not something we can just punch into AI, and equally as unfortunate, it is not always a static decision—circumstances change,” Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek.
He added: “The real danger here is making a short-term decision that can have drastic long-term consequences. Choosing to claim Social Security early means a life-long reduction in benefits, and that may or may not be the best choice for your individual situation.”
Potential Impact of Cuts
According to the Committee for a Responsible Federal Budget (CRFB), a 22 percent benefit reduction would carry severe financial consequences:
- Dual-income couples: Could lose about $16,900 annually, or roughly $1,408 per month.
- Single-earner couples: Could lose approximately $12,700 annually, or about $1,058 per month.
- Higher-income couples: Could see losses as high as $22,300 annually, or around $1,858 per month.
“I think this will ultimately be resolved, but the solution will be very unpopular, especially for the working class. We may see higher payroll taxes and possibly an increase in the Social Security payroll tax cap,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “I think the working class will ultimately bear much of the burden of supporting retirees at this point, which many will not be happy about.”
Misconceptions and Outlook
The survey also revealed gaps in client knowledge regarding other program rules. Roughly 58 percent of advisers said clients were unaware they might qualify for ex-spousal or survivor benefits following a divorce. About half reported clients were surprised that Medicare Part B premiums can lower monthly checks, and nearly 35 percent noted surprise that benefits can be subject to federal taxes.
“Americans are right to take this problem seriously, but I would say fears over the program disappearing are shortsighted,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
While lawmakers have floated various legislative proposals—ranging from tax hikes on high earners to benefit adjustments—time is running short.
“I think Congress ultimately acts. Probably through some combination of additional revenue and benefit changes rather than allowing an abrupt across the board cut,” Ryan said. “But the longer lawmakers wait, the uglier the choices become.”
Contact Newsweek editors for this story: Jason Lemon and Anthony Murray.