Veteran analyst makes crucial Social Security prediction amid DOGE cuts

Social Security is the only form of guaranteed income for seniors, regardless of income level. As inflation and the cost of living rise, millions of retirees rely on their monthly payments to cover necessities.

However, many fear the looming threat of federal cuts to the program and large-scale layoffs could delay or disturb their Social Security payments.

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The Trump administration has announced plans to cut thousands of federal employees at the Social Security Administration, fueling concerns over the future of benefits.

Bob Powell, CFP and editor of Retirement Daily, explains how retirees should prepare for Social Security shakeups, and why seniors shouldn't panic — yet.

Proactively updating Social Security details can help seniors 

In 2024, 54 million retirees received Social Security benefits, the majority of which rely on their payments to cover necessities. 

However, the Trump administration recently announced plans to cut 7,000 employees despite being a historically understaffed federal agency. Though this plan ties in with the larger mission of cutting costs and increasing efficiency at the federal level, many seniors are worried about what these cuts will mean for their benefits.

"There are a couple of key action steps to take as you think about what could happen because of cuts to the Social Security Administration," Powell said. "One is to make sure you create an online 'My Social Security' account by going to ssa.gov."

"This will help protect you against fraud and allow you to review your earnings history," he continued. "You'll want to make sure that you're looking at your record for any errors in your earnings history, and if there are, ensure you contact Social Security immediately to correct them."

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Powell highlights that seniors and older workers approaching retirement age should not let uncertainty and staff cuts impact when they enroll in Social Security benefits, as the timing will impact the amount of their annual payments.

"Whatever you do, don't rush to make a filing decision. The staffing cuts at SSA should not influence when you decide to file for benefits. Ultimately, you want to consider what's in your best interest instead of what's happening at SSA." 

DOGE may not collapse Social Security in the near term, but the bigger picture is less clear

The newly established so-called Department of Government Efficiency (DOGE) has implemented controversial sweeping cuts to federal agencies. Experts and retirees worry that cutting costs may weaken an already fragile Social Security system and could leave millions of seniors in a financial bind.

However, Powell notes that seniors shouldn't worry about layoffs and staffing shortages in the near term.

Related: Your Social Security income may change because of a new rule

"I don't think it's going to create a collapse in the short term, and that's for a couple of reasons," he said. "One is the Social Security Act, which is the law, and at the moment, until the law changes, people will still get their benefits."

However, Powell highlights that the looming threat of the Social Security trust becoming insolvent by 2034 — and maybe even sooner — may be a more likely concern for retirees.

"Now, what people do need to worry about, at least in the short term, is the possibility that the trust fund becomes depleted in 2034 if Congress doesn't act to replenish the trust fund in some way. They could see a reduction in their benefits on the order of 21%, which could be cut across the board for everybody." 

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