Social Security is facing a critical financial crisis, with an estimated $25.1 trillion long-term funding deficit looming over the program. If left unaddressed, this could lead to significant benefit cuts for retirees, including potential reductions of up to 23% starting in 2033.
The Social Security Board of Trustees Report highlights the growing concern. Despite President Trump’s efforts to reform the program, changes are not being enough to address the funding gap. Trump signed an executive order eliminating paper checks and introduced digital distribution methods to save costs and reduce fraud.
However, these reforms have also led to more stringent identification processes for beneficiaries, requiring in-person visits or two-factor authentication. The administration has also announced a reduction of 7,000 employees and closed some offices as part of the Department of Government Efficiency’s efforts to restructure Social Security’s trust funds.
One significant consequence of the funding deficit is the potential for garnishment of Social Security overpayments. The Trump administration aims to collect $23 billion in outstanding overpayments, with nearly 2 million beneficiaries affected. If not addressed, these overpayments could result in a 50% garnishment rate, significantly reducing monthly benefits.
Beneficiaries have several options to potentially waive or reduce what they owe, including Form SSA-632BK (“Request for Waiver of Overpayment Recovery”), SSA-561 (“Request for Reconsideration”), and SSA-634 (“Request for Change in Overpayment Recovery Rate”). However, with the Biden-era recovery rate no longer in effect, beneficiaries can expect a significant reduction in their monthly checks if they fail to take action.
Source: https://www.fool.com/retirement/2025/08/03/social-security-owed-billion-trump-garnish-benefit