Why AARP is warning Americans about Social Security retirement risk

For decades, financial professionals have warned that Social Security was unsustainable in its current form. But when AARP CEO Jo Ann Jenkins recently issued a stark public alert about the program’s solvency risks, the tone wasn’t academic—it was urgent. Speaking not just to policymakers but to the 67 million Americans who rely on the program, Jenkins made it clear: if Congress doesn’t act, benefit cuts could become a reality within the next decade.

Her message came at a time when confidence in retirement readiness is already fraying. Baby Boomers are aging into retirement at record speed. Gen X is next in line, but many feel behind on savings. And younger Americans, witnessing repeated warnings about Social Security, are unsure whether it’ll be there for them at all.

But this isn’t the moment for panic. It’s the moment for plan recalibration.

The Social Security trust funds—one for retirement (OASI) and one for disability (DI)—have long been projected to face depletion. But the timeline is narrowing. The 2024 Trustees Report estimates that without legislative intervention, the retirement trust fund could be depleted by 2033, at which point only about 77% of promised benefits can be paid from incoming payroll taxes.

This isn’t new. The system has faced funding threats before—most notably in the 1980s, when bipartisan reforms extended its solvency. But this time, the demographic math is more stubborn:

• The worker-to-beneficiary ratio is shrinking. In 2000, there were 3.4 workers for every retiree. Today, it’s closer to 2.8. By 2035, it’s projected to drop to 2.3.
• People are living longer. That’s good news, but it means benefits are paid out for more years.
• Wages have stagnated. Payroll taxes fund Social Security—but if wage growth is slow and gig work expands, so does the funding gap.

The AARP CEO’s call wasn’t a prediction of collapse—it was a demand for urgency. Because waiting until the 11th hour risks defaulting to sudden cuts instead of measured reform.

Let’s translate the systemic warning into something personally useful.

Social Security was never meant to be your only retirement income. But for many Americans, it has become a primary pillar—especially for those without robust employer pensions or retirement savings. According to the Social Security Administration, around 40% of retirees rely on it for at least half of their income. For lower-income seniors, it’s often the majority.

If you’re under 50, this doesn’t mean you’ll get nothing. It means you may need to prepare for lower-than-expected benefits, later eligibility, or means-tested formulas. If you’re already collecting—or within 5 years of retirement—you’re less likely to face drastic changes. But even modest adjustments could shift your budgeting needs.

It’s not about forecasting cuts. It’s about preparing for a more flexible income mix—and anchoring your plan to what you control, not just what you’re promised.

For decades, retirement planning was framed around a “three-legged stool”:

1. Social Security
2. Employer-provided pensions or retirement plans
3. Personal savings and investments

Today, many Americans are leaning too hard on the thinnest leg—Social Security.

Employer pensions are rare outside the public sector. Defined contribution plans like 401(k)s and IRAs have replaced them, but participation is inconsistent and balances are uneven. Personal savings? According to Vanguard, the median 401(k) balance for those aged 55–64 is just $89,716. That won’t stretch 20–30 years without help.

So how do you rebuild the stool?

• Boost personal savings while you still can. Even small increases in monthly contributions—especially when automated—can compound meaningfully over 10–20 years.
• Plan around income ratios, not fixed numbers. Rather than asking “How much do I need to retire?” start with: “What portion of my expenses will be covered by guaranteed income, and what needs to come from drawdown or other sources?”
• Understand the asset-to-income bridge. A $300,000 retirement balance doesn’t mean $300,000 of spending. It’s a pool you draw from slowly. Use the 4% rule (or 3% if you’re conservative) to estimate sustainable withdrawals.

Your goal isn’t to replace Social Security. It’s to make your plan less fragile if it weakens.

Rather than guessing what lawmakers will do, ask yourself what you can do now, based on age, income, and retirement vision.

If you're in your 40s or early 50s:

• Do you know how much of your projected retirement income is dependent on Social Security? Use SSA.gov’s estimator and compare it to your current plan.
• Are you optimizing tax-deferred and Roth accounts? A mix of both provides income flexibility—especially if taxes rise to support entitlement programs.
• Can you afford to delay claiming Social Security? Waiting until age 70 increases your monthly benefit by up to 32%—but only if you have other income to bridge the gap.

If you’re in your 30s or younger:

• Are you saving at least 15% of your income, including employer match? If not, start with 10% and build upward.
• Do you treat your emergency fund and long-term savings as distinct? Blurring the two can derail your retirement goals every time a short-term crisis hits.
• Are you building skills that support long-term employability—not just salary? Delayed retirement may be more likely—so work you can sustain matters.

The goal isn’t perfection. It’s a diversified, durable foundation that can adapt as policy shifts.

Some people react to Social Security headlines by freezing. “If the system’s broken,” they reason, “why bother planning around it?” But that’s like refusing to wear a seatbelt because traffic is unpredictable.

In reality, Social Security isn’t a static system. Even modest reforms—like raising the income cap on taxable wages or adjusting full retirement age gradually—can shore up solvency. Historically, when faced with funding cliffs, lawmakers have acted. The reforms may be imperfect, but the system has never failed to pay benefits.

And that’s the crucial distinction: a political standoff isn’t the same as collapse. But if your plan only works in a best-case scenario, you’re outsourcing your future to legislative timing. Instead, anchor your plan to what doesn’t change: the need for income, the cost of longevity, and the value of compounding.

Social Security is designed to replace only about 40% of your pre-retirement income if you’re a median earner. That number shrinks if you’re a higher-income worker or if you retire early. Yet many people still default to a number-focused mindset: “I’ll retire at 65 with $X in savings.”

The smarter shift is to focus on income streams:

• What will reliably come in each month?
• What are my fixed vs variable expenses?
• What risks (inflation, medical costs, caregiving) could drain my plan faster than expected?

Social Security, even if trimmed, remains a guaranteed annuity indexed to inflation. That’s rare—and valuable. But it works best when complemented by flexible, controlled income like Roth withdrawals, rental income, or even part-time consulting. A resilient plan includes buffers, bridges, and optionality—not just numbers on a calculator.

Social Security’s future may look uncertain—but that’s not a reason to rush, panic, or overhaul your plan in fear. The most successful retirement strategies are built slowly, intentionally, and with room for course correction.

What AARP’s warning really signals isn’t that the system will disappear—but that over-reliance on any one income source is risky. And that includes benefits you’re “entitled” to.

So take a breath. Pull up your projections. And ask:

• “What am I assuming about my retirement income—and what happens if that assumption changes?”
• “Do I have at least two other levers to pull if Social Security underperforms?”

Start with your timeline. Build from what you control. And keep the pace steady.

Because in retirement planning—especially in times of policy noise—slow is still strategic.