Warren Buffett’s blunt Social Security warning is becoming reality | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

For many retirees, Social Security benefits are a primary income source, or even their only income source. Unfortunately for those retirees, their financial security is facing a very real and substantial threat.

While Social Security is an entitlement program, and the benefits that workers collect from it are earned benefits they are entitled to as a result of paying into the system, there is a strong chance that the program will not continue working as intended.

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The issue is one that famed investor Warren Buffett has warned about for a very long time. In fact, his warnings about Social Security date all the way back to 2005, when he responded to a question about whether Social Security was a Ponzi scheme and said, “I basically believe that anything that would take Social Security payments below their present guaranteed level is a mistake.”

Unfortunately, new evidence suggests that Buffett’s warnings are about to become reality, and sooner rather than later.

Warren Buffett is very worried about the future of Social Security.

Image source&colon; Bill Pugliano/Getty Images

Warren Buffett’s Social Security warning is about to come true

Unfortunately, there is a very real and imminent danger that the cuts Buffett warned about will happen. The Committee for a Responsible Federal Budget has released a very troubling new report demonstrating that the Oracle of Omaha knew exactly what he was talking about.

According to the Committee for a Responsible Federal Budget, the Social Security Trust Fund is just over seven years away from being insolvent. This is based on both the Social Security Trustee’s report data, as well as the Committee’s projections of how the One Big Beautiful Bill Act are likely going to impact Social Security.

If the reserves in the trust fund are depleted, that means Social Security is only going to be able to pay out benefits from current revenue. The CRFB estimates that this is going to happen late in 2032 and that when it does, a 24% cut to benefits will be necessary.

This is different from the most recent projections by the Social Security Trustees, which anticipated that benefits could be paid in full through 2035. It is based on the CRFB’s analysis of the impact of the One Big Beautiful Bill.

For a dual-earning couple, the cut to benefits that could happen in as little as seven years would result in an $18,100 reduction in annual income from Social Security, according to the CRFB’s analysis. This is not just a small cut, it is a huge cut – and it seems to be exactly what Buffett was warning about when he said that it would be a mistake to take benefits below their current level. This would be well below that level.

Social Security fixes are necessary

Buffett made clear that while he is worried a benefit cut would be a mistake, he also thinks the situation is salvageable if Congress were to act. He has commented that “our country can easily handle the Social Security issue,” and has made several suggestions for fixes, including:

Increasing the maximum amount of income that is subject to Social Security tax as currently high earners pay taxes only on part of their income up to the wage base limit
Raising full retirement age (although he made this suggestion in 2006 and said that 65 might not make sense, and full retirement age has already been moved later and is now 67 for anyone born in 1960 or beyond)

The big question is whether Congress has the political will to make these changes, both of which have the potential to be very unpopular.

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Of course, the changes wouldn’t be as unpopular as hitting retirees with a huge cut to benefits that Buffett warned would be such a grave mistake.