According to the Social Security Administration, an average of nearly 69 million Americans per month will receive a Social Security benefit in 2025—a number that highlights just how vital this program is to the financial well-being of retirees, individuals with disabilities and surviving family members. Recent estimates from Social Security’s trustees predict the trust fund will be unable to pay all scheduled payments starting as early as 2034. For the younger generations, this could mean less financial support in retirement.

With ongoing conversations around the long-term sustainability of Social Security, many people are asking what the future of Social Security looks like and how they should prepare.

Understanding the Current Landscape

Social Security is funded primarily through payroll taxes under the Federal Insurance Contributions Act (FICA). However, shifting demographics—most notably, an aging population and lower birth rates—are placing significant pressure on the program. The latest projections suggest that, without changes, the combined reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to have enough dedicated revenue to pay all scheduled benefits and associated administrative costs until 2034, one year earlier than projected last year, with 81 percent of benefits payable at that time. This doesn’t mean the program will disappear altogether, but it does mean that benefits could be reduced unless legislative action is taken.

While it's unlikely that Social Security will be eliminated entirely, changes are likely. These may include raising the retirement age, increasing payroll taxes, adjusting cost-of-living formulas or modifying benefit calculations.

What This Means for You

For individuals approaching retirement, the key takeaway is that Social Security should be only one part of a diversified retirement strategy rather than the whole plan. Relying solely on Social Security benefits could leave you vulnerable, especially as potential reforms may affect future payouts.

For those new to the workforce, starting to contribute to a retirement income plan early is more important than ever. If your company offers a 401(k) plan, contribute as much as possible. However, if that isn’t an option but your employer does offer a company match, try to contribute at least enough to earn it.

If your employer offers a qualified high-deductible health plan (HDHP), consider participating in it so you’re able to contribute to a health savings account (HSA). An HSA is a tax-advantaged savings account that an individual can contribute to if they are enrolled in an HDHP. An HSA enables you to set aside pre-tax money to pay for qualified medical expenses. These qualified expenses include deductibles, co-payments, coinsurance, addiction treatment and more.

Utilizing a proactive approach that accounts for a wide range of scenarios, including potential changes to Social Security, can help ensure that you are not only prepared for today, but also ready to face the uncertainties of tomorrow.

Planning Ahead with Confidence

Whether you’re just starting your career or nearing retirement, there are a few key steps you can take to position yourself well:

• Understand your benefits. Create a “my Social Security” account at ssa.gov to review your earnings history and estimated benefits.
• Diversify your retirement savings. Make consistent contributions to retirement accounts such as 401(k)s and Individual Retirement Accounts (IRAs) to build financial security beyond government benefits.
• Stay informed. As legislation evolves, keeping up with changes will help you make informed decisions.
• Work with a trusted advisor. Financial planning is not one-size-fits-all. A customized approach that is uniquely tailored to you, your goals and your values can help you align your investments with your desired retirement lifestyle.

How Busey Can Help

At Busey Wealth Management, we’re here to help individuals and families prepare for every stage of life. Our team offers personalized advice, disciplined investment strategies and access to banking and lending solutions to support your pursuit of financial well-being.

When it comes to planning for retirement, you don’t have to do it alone. For more than 100 years, Busey Wealth Management has been providing trusted experience and proven results to our valued clients by providing clarity and empowering confidence.

Learn more about our holistic services and find an advisor near you by visiting busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.