If Social Security benefits were cut, here's how much more you'd need to save for retirement

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If Social Security benefits were reduced or eliminated, Americans would need to double or triple their savings rate to retire with a sufficient nest egg.

Meanwhile, "the old-age poverty rate would soar," said Richard Johnson, a senior fellow at the Urban Institute.

Social Security is the main source of income for Americans age 65 and older.

Social Security is essential to older Americans' financial security, yet there always seems to be a new headline about how the benefits are at risk .

Douglas Boneparth, a certified financial planner and president and founder of  Bone Fide Wealth in New York, said clients ask him how they can prepare for their retirement if Social Security benefits are slashed — or even eliminated.

"We work with a relatively young clientele, and they aren't too confident today's system will be the one they inherit when they retire" Boneparth said. "They want to hedge their bets."

CNBC asked Boneparth, a member of CNBC's  Advisor Council , if he could provide an example of how much more people would need to save if they have to fund their retirement with a smaller Social Security benefit, or none at all.

Workers would need to triple savings

CFP Clifford Cornell, an associate financial advisor at Bone Fide Wealth, provided a scenario of a 30-year-old woman who earns $75,000 a year and already has $20,000 saved for retirement. The woman plans to leave the workforce at age 65 and to spend about $40,000 a year in retirement. Her life expectancy is 90.

In order not to run out of money in retirement, she'd need to save $375 a month in her workplace 401(k) plan — if the Social Security program remains fully in place. Cornell assumed a 6% annual return before retirement and 4% after.

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If Social Security benefits were cut in half, she would need to save $750 a month to not run out of money in retirement, or double the amount based on a fully funded program.

If the program were completely done away with, she'd need to save $1,125 a month, or triple the amount.

Social Security is the main source of income for Americans age 65 and older. With the benefits, about 10% of older adults already live in poverty, according to the Center on Budget and Policy Priorities. The share of older people living in poverty would swell to nearly 40% without the benefits. The average retired worker receives about $1,840 a month.

"The old-age poverty rate would soar if Social Security benefits were cut," said Richard Johnson, a senior fellow at the Urban Institute. "Millions of seniors would be unable to afford basic needs, like food, shelter and health care. Many seniors would have to turn to their children for financial help."

The future of Social Security

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Personal Finance

The Social Security program has been weakened by a rise in people retiring and the fact that people are living longer. About 10,000 baby boomers retire every day on average. Since beneficiaries are living longer, the program has been paying recipients over a longer period of time. The share of workers paying into the system — via payroll taxes — has been falling relative to the number of beneficiaries, creating an imbalance.

As a result, without any action from lawmakers, the trust fund that supports Social Security benefits for retirees is  estimated  to run dry in 2033.

If the trust fund is depleted, it doesn't mean benefits would go away entirely.

Workers would continue to pay Social Security payroll taxes, and those collected funds would still be payable to retirees. However, there would be cuts. About 77% of promised benefits would be payable if the trust fund runs out, according to the Social Security Administration.

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," said David Blanchett, head of retirement research at PGIM, the asset management arm of Prudential Financial, in September on "This week, your wallet," an audio program produced by CNBC's personal finance team.

Older people and current retirees likely won't see a change to their benefits, Blanchett said. However, "I do believe younger Americans — if you're maybe in your 40s — should count on a lower benefit," he said.

— Additional reporting by CNBC's Greg Iacurci.

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Skip Navigation. watch live. Markets. Pre-Markets. U.S. Markets. Currencies. Cryptocurrency. Futures & Commodities. Bonds. Funds & ETFs. Business. Economy. Finance. Health & Science. Media. Real Estate. Energy. Climate. Transportation. Industrials. Retail. Wealth. Life. Small Business. Investing. Personal Finance. Fintech. Financial Advisors. Options Action. ETF Street. Buffett Archive. Earnings. Trader Talk. Tech. Cybersecurity. Enterprise. Internet. Media. Mobile. Social Media. CNBC Disruptor 50. Tech Guide. Politics. White House. Policy. Defense. Congress. Equity and Opportunity. CNBC TV. Live TV. Live Audio. Business Day Shows. Entertainment Shows. Full Episodes. Latest Video. Top Video. CEO Interviews. CNBC Documentaries. CNBC Podcasts. CNBC World. Digital Originals. Live TV Schedule. Watchlist. Investing Club. Trust Portfolio. Analysis. Trade Alerts. Meeting Videos. Homestretch. Jim's Columns. Education. Subscribe. Sign In. PRO. Pro News. Pro Live. Stock Screener. Market Forecast. Subscribe. Sign In. Menu. Make It. select ALL SELECT Credit Cards Loans Banking Mortgages Insurance Credit Monitoring Personal Finance Small Business Taxes Help for Low Credit Scores Investing SELECT All Credit Cards Find the Credit Card for You Best Credit Cards Best Rewards Credit Cards Best Travel Credit Cards Best 0% APR Credit Cards Best Balance Transfer Credit Cards Best Cash Back Credit Cards Best Credit Card Welcome Bonuses Best Credit Cards to Build Credit SELECT All Loans Find the Best Personal Loan for You Best Personal Loans Best Debt Consolidation Loans Best Loans to Refinance Credit Card Debt Best Loans with Fast Funding Best Small Personal Loans Best Large Personal Loans Best Personal Loans to Apply Online Best Student Loan Refinance SELECT All Banking Find the Savings Account for You Best High Yield Savings Accounts Best Big Bank Savings Accounts Best Big Bank Checking Accounts Best No Fee Checking Accounts No Overdraft Fee Checking Accounts Best Checking Account Bonuses Best Money Market Accounts Best CDs Best Credit Unions SELECT All Mortgages Best Mortgages Best Mortgages for Small Down Payment Best Mortgages for No Down Payment Best Mortgages with No Origination Fee Best Mortgages for Average Credit Score Adjustable Rate Mortgages Affording a Mortgage SELECT All Insurance Best Life Insurance Best Homeowners Insurance Best Renters Insurance Best Car Insurance Travel Insurance SELECT All Credit Monitoring Best Credit Monitoring Services Best Identity Theft Protection How to Boost Your Credit Score Credit Repair Services SELECT All Personal Finance Best Budgeting Apps Best Expense Tracker Apps Best Money Transfer Apps Best Resale Apps and Sites Buy Now Pay Later (BNPL) Apps Best Debt Relief SELECT All Small Business Best Small Business Savings Accounts Best Small Business Checking Accounts Best Credit Cards for Small Business Best Small Business Loans Best Tax Software for Small Business SELECT All Taxes Best Tax Software Best Tax Software for Small Businesses Tax Refunds SELECT All Help for Low Credit Scores Best Credit Cards for Bad Credit Best Personal Loans for Bad Credit Best Debt Consolidation Loans for Bad Credit Personal Loans if You Don't Have Credit Best Credit Cards for Building Credit Personal Loans for 580 Credit Score or Lower Personal Loans for 670 Credit Score or Lower Best Mortgages for Bad Credit Best Hardship Loans How to Boost Your Credit Score SELECT All Investing Best IRA Accounts Best Roth IRA Accounts Best Investing Apps Best Free Stock Trading Platforms Best Robo-Advisors Index Funds Mutual Funds ETFs Bonds. USA. INTL. watch live. Search quotes, news & videos. Watchlist. SIGN IN. Markets. Business. Investing. Tech. Politics. CNBC TV. Watchlist. Investing Club. PRO. Menu. Personal Finance. Annie Nova. @AnnieReporter. WATCH LIVE. If Social Security benefits were reduced or eliminated, Americans would need to double or triple their savings rate to retire with a sufficient nest egg. Meanwhile, "the old-age poverty rate would soar," said Richard Johnson, a senior fellow at the Urban Institute. Social Security is the main source of income for Americans age 65 and older. Social Security is essential to older Americans' financial security, yet there always seems to be a new headline about how the benefits are at risk . Douglas Boneparth, a certified financial planner and president and founder of  Bone Fide Wealth in New York, said clients ask him how they can prepare for their retirement if Social Security benefits are slashed — or even eliminated. "We work with a relatively young clientele, and they aren't too confident today's system will be the one they inherit when they retire" Boneparth said. "They want to hedge their bets." CNBC asked Boneparth, a member of CNBC's  Advisor Council , if he could provide an example of how much more people would need to save if they have to fund their retirement with a smaller Social Security benefit, or none at all. Workers would need to triple savings. CFP Clifford Cornell, an associate financial advisor at Bone Fide Wealth, provided a scenario of a 30-year-old woman who earns $75,000 a year and already has $20,000 saved for retirement. The woman plans to leave the workforce at age 65 and to spend about $40,000 a year in retirement. Her life expectancy is 90. In order not to run out of money in retirement, she'd need to save $375 a month in her workplace 401(k) plan — if the Social Security program remains fully in place. Cornell assumed a 6% annual return before retirement and 4% after. More from Personal Finance: Biden ESG rule survives challenge in court IRS to target 'unscrupulous' tax preparers amid new crackdown White House moves ahead with new plan to cancel student debt. If Social Security benefits were cut in half, she would need to save $750 a month to not run out of money in retirement, or double the amount based on a fully funded program. If the program were completely done away with, she'd need to save $1,125 a month, or triple the amount. Social Security is the main source of income for Americans age 65 and older. With the benefits, about 10% of older adults already live in poverty, according to the Center on Budget and Policy Priorities. The share of older people living in poverty would swell to nearly 40% without the benefits. The average retired worker receives about $1,840 a month. "The old-age poverty rate would soar if Social Security benefits were cut," said Richard Johnson, a senior fellow at the Urban Institute. "Millions of seniors would be unable to afford basic needs, like food, shelter and health care. Many seniors would have to turn to their children for financial help." The future of Social Security. watch now. VIDEO. 2:26. 02:26. Personal Finance. The Social Security program has been weakened by a rise in people retiring and the fact that people are living longer. About 10,000 baby boomers retire every day on average. Since beneficiaries are living longer, the program has been paying recipients over a longer period of time. The share of workers paying into the system — via payroll taxes — has been falling relative to the number of beneficiaries, creating an imbalance. As a result, without any action from lawmakers, the trust fund that supports Social Security benefits for retirees is  estimated  to run dry in 2033. If the trust fund is depleted, it doesn't mean benefits would go away entirely. Workers would continue to pay Social Security payroll taxes, and those collected funds would still be payable to retirees. However, there would be cuts. About 77% of promised benefits would be payable if the trust fund runs out, according to the Social Security Administration. 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," said David Blanchett, head of retirement research at PGIM, the asset management arm of Prudential Financial, in September on "This week, your wallet," an audio program produced by CNBC's personal finance team. Older people and current retirees likely won't see a change to their benefits, Blanchett said. However, "I do believe younger Americans — if you're maybe in your 40s — should count on a lower benefit," he said. — Additional reporting by CNBC's Greg Iacurci. Subscribe to CNBC PRO. Licensing & Reprints. CNBC Councils. Select Personal Finance. CNBC on Peacock. Join the CNBC Panel. Supply Chain Values. Select Shopping. Closed Captioning. Digital Products. News Releases. Internships. Corrections. About CNBC. Ad Choices. Site Map. Podcasts. Careers. Help. Contact. News Tips. Got a confidential news tip? We want to hear from you. Get In Touch. Advertise With Us. Please Contact Us. CNBC Newsletters. Sign up for free newsletters and get more CNBC delivered to your inbox. Sign Up Now. Get this delivered to your inbox, and more info about our products and services. Privacy Policy. |. |. CA Notice. |. Terms of Service. © 2023 CNBC LLC. All Rights Reserved. A Division of NBCUniversal. Data is a real-time snapshot *Data is delayed at least 15 minutes. 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