Social Security Turns 91 as Its Future Hangs in the Balance—and Housing Costs Squeeze Retirees

Ninety-one years after Social Security was signed into law, the program has largely delivered on its original promise.

In 1935, more than half of older Americans were estimated to lack enough income to support themselves. Today, Social Security keeps 17 million older adults above the poverty line, according to a Center on Budget and Policy Priorities analysis.

And yet, the retirement it was meant to help fund has dramatically changed.

Housing costs are the clearest example. Expenses for homeowners without a mortgage jumped 35% between 2019 and 2024, far outpacing the 23% growth in incomes over the same period.

All the while, more older Americans are carrying housing debt into their golden years. While just 3% of homeowners 80 and older had a mortgage in 1989, 31% did in 2022.

Those new pressures are colliding with another threat. Social Security's retirement trust fund is projected to exhaust its reserves in 2032, after which incoming revenue would cover only about 78% of scheduled benefits without congressional action.

President Franklin D. Roosevelt, who championed the program, warned that it could never protect Americans against every financial risk.

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life," he said signing the bill into law. "But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age."

Nine decades later, that promise is being tested from both sides: by housing costs that consume more of retirees’ income and by a Social Security system that may soon be able to pay less than promised.

Why housing costs are squeezing retirees

Nearly 24 million Americans 65 and older rely on Social Security to provide at least half of their family income. Even without a mortgage, average monthly housing costs of $629 (for insurance, property tax, utilities, etc.) eat up 30% of a retired worker’s average $2,086 monthly Social Security benefit.

Social Security benefits do rise over time through annual cost-of-living adjustments, or COLAs, which are tied to inflation. But those increases reflect overall consumer prices—not necessarily the specific expenses retirees are facing.

Take, for example, some of the most common essential housing expenses.

Property taxes rose 31% nationwide between 2019 and 2025, while average monthly homeowners insurance premiums jumped 72%, according to Harvard University's Joint Center for Housing Studies. Over that same period, annual Social Security COLAs ranged from just 1.3% to 8.7%.

That mismatch helps explain why a benefit designed to preserve purchasing power can still buy less over time. And for a major expense like housing, it's especially acute.

Social Security alone is enough to cover living expenses in only 10 states, according to a Realtor.com® analysis of median Social Security benefits by state and the Elder Economic Security Standard Index. Everywhere else, retirees face shortfalls as great as thousands of dollars per year.

There's some evidence, too, that the strain is starting to work against the program's original intention. Among older homeowners, the housing-cost-burden rate rose from 24% in 2019 to nearly 28% in 2023, leaving 7.9 million older homeowner households spending more than 30% of their income on housing.

More Americans are carrying mortgages into retirement

For another group of retirees, housing debt is also weighing on their monthly benefits check.

In 1989, 24% of homeowners aged 65 to 79 had a mortgage on their primary residence, including home equity loans and HELOCs. By 2022, that figure had risen to 41%, according to a Harvard analysis of Federal Reserve Survey of Consumer Finances data.

Balances have also grown. Among mortgaged homeowners aged 65 to 79, the inflation-adjusted median balance climbed from about $21,000 in 1989 to $110,000 in 2022. Among homeowners 80 and older, it rose from roughly $9,000 to $79,000.

It's a seismic shift in one of the most foundational assumptions of retirement planning: that housing expenses will fall as people age because the mortgage will eventually be paid off.

Will Social Security run out of money in 2032?

But the biggest threat is the future of the program itself.

The 2026 Social Security Trustees Report projects that the Old-Age and Survivors Insurance trust fund, which pays retirement and survivor benefits, will exhaust its reserves in the fourth quarter of 2032.

At that point and absent congressional action, the income from payroll taxes and other revenue would be enough to pay out approximately 78% of scheduled benefits. Applied to today's average benefit check, that would mean a $459 per month hit.

The timing of that shortfall could hardly be worse. By 2030, every baby boomer will be at least 65, and roughly 1 in 5 Americans will be retirement age. By 2034, the 65-and-older population is projected to reach about 77 million.

That leaves policymakers and future retirees with two questions that become more intertwined by the day: How much income will Social Security be able to provide, and how much housing will that be able to afford?