Most Americans think Social Security is going broke. Is it?

We are told that Social Security is running out of money, facing bankruptcy, going broke. That language is figurative and imprecise, but many Americans take it literally. 

Nearly two-thirds of us believe that when the much-feared Social Security shortfall arrives, around 2032, benefit payments will cease.  

That finding comes from a paper by researchers at UCLA and Cornell University, published in the April issue of the Journal of Experimental Psychology: General.

But is Social Security really running out of money? Here are the facts:   

Is Social Security really running out of cash?

Social Security faces a looming fiscal cliff. More money is going out of the federal program than coming in, and a once-plentiful cash reserve is dwindling. 

When the reserve runs out, if nothing is done, the federal agency will have sufficient funds to pay only about 81% of full benefits, according to an estimate from AARP.  

There’s a big difference between 81% and zero, but many Americans don’t see it. The new research explores the fundamental misunderstanding about the fate of America’s retirement trust fund.  

Suzanne Shu, one of the paper’s authors, is a professor of marketing at Cornell University’s SC Johnson College of Business. 

Whenever Shu talked about Social Security with rank-and-file Americans, she said, people “would say things like, ‘Social Security is going bankrupt; it’s not going to be around.’” 

She and her colleagues wondered, “Is there something happening in the messaging here?” 

Here's why Americans think Social Security is broke

Their research found that many Americans assume Social Security is “going broke” because of how the shortfall is framed in public discourse. 

“It doesn’t help that there are politicians and others out there who are saying Social Security is going bankrupt,” Shu said.  

Here’s a quick overview of how Social Security works: 

Part of your income goes into a pair of Social Security trust funds: one for retirement, the other for disability. Social Security benefits are paid from those funds.  

Social Security is known as a “pay-as-you-go” program. Benefits paid to today’s retirees are mostly collected from current workers. The benefit you receive is not money you earned. (That is another common misconception.)  

Through most of its history, Social Security collected more money than it paid out, yielding a reserve that totaled $2.7 trillion at the end of 2024. Yet, as America ages, the reserve is dwindling. The latest projections show it running dry by 2032.  

Unpacking the Social Security shortfall

When Americans read about the Social Security shortfall, the discussion usually centers on that dwindling reserve. 

In the new research, when study participants focused on a graph that showed the reserve dropping to zero, 64% subsequently believed their benefits would disappear entirely. 

That belief ignores a basic fact about Social Security: New revenue comes in every year. That’s why, even when the reserve is depleted, the program will still pay a large share of current benefits. 

When study participants saw a graph that showed money flowing into and out of the Social Security program, the share who believed they would reap no benefits at all dropped to 56%, still a majority. 

An even better way to frame the Social Security shortfall, the researchers found, is to remind Americans of the payroll taxes that fund the system.  

“Think about it as a worker,” Shu said. “Do you think the government is going to stop collecting Social Security out of people’s paychecks? ... The next question is, where do you think that money’s going to go?” 

When study participants thought about the taxes that continue to fund Social Security, the share who expected no benefits dropped to about 40%.  

Social Security fears prompt bad decisions

The study reaffirms that many Americans fear Social Security won’t be there when they retire.  

A Bankrate survey in the fall of 2025 found that 77% of Americans were concerned the promised benefits “won’t be paid” upon their retirement.   

In a 2025 report from the Transamerica Center for Retirement Studies, 71% of not-yet-retired Americans voiced concern that Social Security “will not be there for me.” 

That fear has prompted many Americans to claim Social Security early, on the theory that they should collect their checks for as long as they last.  

In a 2025 AARP survey, roughly one-quarter of Americans ages 62 to 66 said they had decided within the past year to claim Social Security early, or expected to do so.   

For many retirees, claiming Social Security early is a mistake. You can claim as early as 62, but your monthly check gets bigger every year you wait, maxing out at 70. Based on average human longevity, economists say, most people are better off waiting.   

When Shu talked to working Americans about the benefits of claiming Social Security later, she said, “A lot of the feedback I would get would be people saying, ‘I don’t think Social Security will be there that long, so why should I wait?”