Social Security's trust funds are running dry. Here are 4 things to know


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of Personal Finance produced by CNBC. Listen to the latest episode .hereSocial Security is the largest federal program in the U.S. The vast majority of older Americans get Social Security benefits, which either partially or even fully fund their income in retirement.

Yet the program faces solvency issues.

“Its overall health has implications for virtually every American,” said David Blanchett, head of retirement research at PGIM, the asset management arm of Prudential Financial.

Here are four takeaways from a recent conversation about Social Security’s future with Blanchett; Doug Boneparth, a certified financial planner and founder of Bone Fide Wealth in New York; and CNBC personal finance reporter Lorie Konish.

1. Social Security is ‘America’s pension safety net’

Virtually every retiree receives some sort of guaranteed income stream — and Social Security is “by far” the most prominent of these income sources, Blanchett said.

About 97% of Americans age 60 and older either receive or will collect Social Security benefits, according to Social Security Administration

data. Among elderly Social Security beneficiaries, 37% of men and 42% of women get at least half of their income from the program, according to a 2021 SSA report using data from 2015.More from Life Changes:

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Social Security is “America’s pension safety net,” Blanchett said.

“It’s really difficult to understate its importance, especially when it comes to providing income during retirement,” he added.

The average benefit for retirees, as of June, was $1,837 a month.

About 67 million Americans get a Social Security check each month. The average monthly benefit for retirees was $1,837 as of June.

2. Demographics are stressing the program’s finances

Social Security’s finances are under pressure.

Congress will almost surely tweak Social Security to fix the solvency problem.

Potential fixes might include reducing benefits, delaying the “

full retirement age,” raising taxes on benefits, increasing the financial penalties for claiming Social Security before full retirement age or a combination of these and other factors.

It’s likely to be a “last-second compromise” and “there are going to be losers,” Blanchett said.