Even the AARP is wondering "How much longer will Social Security be around?"

While the media continues to spew headlines proclaiming the death of pension plans   ('It's really over': Corporate pensions head for extinction as nature of retirement plans changes)- an event for most corporations which occurred over two decades ago; there is minimal mainstream press over the risk of depending on Social Security in retirement and what planning actions you should take.

There have been numerous articles outlining how the system will run through its reserve assets by 2035 and will need to reduce payments if nothing is done (AARP: How much longer will Social Security be around?) and multiple politicians running for office in 2020 have proposed plans for "saving" social security.  The bottom line is there has been no action in Washington D.C. for two decades.  Either there must be a increase in the portion of salary taxed and/or for an increase in the ceiling on the amount of salary that is taxed.

This lack of political action, of course, has left the Social Security system in a unfortunate position where it will not be able to fulfill its obligations starting in 2035 (according to the 2019 Trustee Report). "OASI would be able to pay 77% of promised benefits when funds are depleted in 2034" according to USA Today What happens when Social Security goes broke?

The action needed in your retirement planning

The bottom line is that with no mechanism to rescue Social Security in place you should be expecting payment cuts of 23% in whatever payments you expect out of Social Security out in 2035 Your retirement planning should include this expectation plus the assumption of no cost of living increases.

Any retirement plan evaluating cash flow in your later years should have this assumption in place as one of the scenarios to be evaluated.