Concerns about Social Security benefits are nothing new. Whether it’s the fear of a potential lack of funding, which could deplete the program, or Americans relying too much on the benefits, the topic remains top of mind for everyone, including homeowners.
Now, with the new Trump administration, there are additional concerns. Elon Musk’s appointment to head the newly formed DOGE (Department of Government Efficiency) and his review of the U.S. Department of Treasury’s payment system are raising alarm bells for some.
Namely, the latest crop of seniors who have just started to collect their benefits and who, more than any generation before them, are relying on those benefits to pay their bills, including their mortgages.
Younger retirees rely on their Social Security
A recent report conducted by the Employee Benefit Research Institute found that younger retirees rely heavily on their Social Security benefits.
Older retirees, aged 74 and 75, reported that 52% of their income came from Social Security, while the youngest, aged 62 and 63, said they drew 67% of their income from the same retirement trust fund, according to the institute’s 2024 Spending in Retirement Survey.
“The reliance on Social Security as an income source declines with age, or at least that’s what the retirees are telling us,” said Bridget Bearden, research and development strategist at EBRI and author of the study, to USA Today.
When asked whether the findings were surprising, Andrew Latham, certified financial planner and content director at Supermoney.com, said that while they were “eye-opening,” they were not unexpected.
“Younger retirees leaning more on Social Security tracks well with the decline of traditional pensions and the challenges in building substantial retirement savings. The shift from pensions to 401(k)s has left many without a solid financial cushion, making Social Security a lifeline,” said Latham.
How much Social Security do most retirees collect?
As of January 2025, the estimated average monthly Social Security retirement benefit, which changes monthly, is $1,976, according to the Social Security website.
“If that’s two-thirds of your income, that’s not very much,” said Jason Sorens, economist at the American Institute for Economic Research. “It’s surprising that younger retirees haven’t saved as much as older retirees through the private market. The main explanation is probably the decline in private-sector defined-benefit pensions.”
Relying solely on defined-contribution plans like 401(k)s doesn’t cut it for most Americans, as these often fall short due to inconsistent contributions and market volatility, according to Latham.
“This shift puts more responsibility on individuals to manage their retirement savings, leading to increased reliance on Social Security,” he said.
And yet, the Social Security Administration warns that the benefits are not intended to be the sole source of retirement income.
“On average, Social Security will replace about 40% of your annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably when you retire,” it added.
Concerns over Social Security stability under Trump
Chatter around Social Security concerns has picked up since Musk’s DOGE appointment and the announcement of his mission to reduce government waste.
Reports about that department having “access to a government payment system that is responsible for $6 trillion in annual federal payments—including Social Security and Medicare benefits—has prompted criticism from Democratic lawmakers and advocates,” CNBC reported.
“Social Security beneficiaries and their families have every reason to be alarmed by Elon Musk’s takeover of the U.S. Department of Treasury’s payment system, which is responsible for paying Social Security benefits,” the National Committee to Preserve Social Security and Medicare said in a statement.
As Latham further noted, any proposed changes or cuts to this popular program could face significant political backlash. Social Security is often considered the “third rail” of American politics—untouchable due to its widespread support.
Eliminating the program would be unprecedented and legally complex, to say the least.
“While the legal grounds for suing the federal government are uncertain—there is such a thing as sovereign immunity—the political ramifications would be immense,” said Latham.
It’s also important to note that The Social Security Board of Trustees expects to have “dedicated revenue to pay all scheduled benefits and associated administrative costs until 2035, one year later than projected last year, with 83% of benefits payable at that time,” according to its annual report.
So, for now, it sounds like retirees need not worry—even though they might already be in a tight spot.
Could retirees afford their mortgage without Social Security?
So where does this leave retirees still saddled with mortgages?
There are a staggering 10.5 million housing units in the country owned by Americans 65 and older with mortgages, according to LendingTree.
“But paying off a mortgage before retirement age isn’t feasible for everyone,” it added.
What’s more, the trend of “aging in place” has gained momentum, as many retirees favor staying in their homes instead of downsizing or relocating to cheaper locales.
AARP’s national 2024 Home and Community Preferences Survey found that an eye-popping 75% of adults aged 50 and older “wish to remain in their current homes as they age.”
However, paying their mortgage off can be challenging for many retirees who rely on fixed income.
The Center for Retirement Research at Boston College found that “many do not have enough to make their monthly payments comfortably.” As such, many are facing tough choices, with or without Social Security.
“One option is to delay retirement, and the most leveraged households retire a full year later than those that don’t have a mortgage payment,” according to the report. “High housing leverage,” the researchers said, “may induce later retirement.”
So what can they do?
Austin Kilgore, an analyst with the Achieve Center for Consumer Insights, part of digital personal finance company Achieve, said that the aging-in-place trend might also entail investing in their homes to make appropriate modifications.
Yet, it is usually much less expensive than moving, he said.
“With the dramatic rise in home equity over the past several years, these homeowners have that asset to tap. We are seeing more seniors taking out HELOCs, for example, for home remodeling and updates,” added Kilgore.
