I have seen a ton of headlines lately about how AI could drain Social Security, and that’s definitely a top concern for me. I’m sure it’s something you’re worried about as well. So today we want to talk about what the rise of artificial intelligence means for your retirement and what you can do about it right now.
This is a transcript of our video. You can watch the full video on our YouTube channel: Low Income Relief.
Why AI Is Part Of The Conversation
Let’s talk about why this is even a thing, because I know we see a lot of headlines about AI and a lot of doomsday talk that can be really scary. So let’s start by establishing the facts.
We all know that the Social Security Trust Fund is at risk. It could face insolvency as early as 2032, and that deadline just keeps getting closer. We also know that AI is potentially accelerating it because fewer workers—as people lose their jobs—means less payroll taxes coming in, which means faster depletion.
A lot of those jobs that are being lost are white-collar jobs that pay pretty well and lead to higher tax inputs than perhaps lower-wage jobs might.
We also know that if no action is taken to fix Social Security, benefits are expected to be cut to about 77 cents on the dollar in just a few years. But those job losses could potentially make those cuts more drastic because at that time we will start relying solely on the payroll taxes that are coming in.
How The Social Security System Works
I know that sounds confusing, so let’s dive in and look at how this actually works and why this is a risk.
Workers pay payroll taxes that go into Social Security. The trust funds are there to supplement what the payroll taxes can’t cover. The end result is those monthly benefits.
Right now, we are drawing down the trust funds every month because incoming payroll taxes are not sufficient to pay the monthly benefits that are required.
AI And Job Automation
We know that AI is rapidly automating white-collar work—from legal filings to sales to back-office administration.
McKinsey estimates that up to 30% of U.S. work hours could be automated by 2030. Goldman Sachs predicts 2.5% of all U.S. jobs are at immediate risk.
The jobs with the highest risk include:
- Administrative roles
- Back-office work
- Sales
- Management
- Legal positions
There is also some risk for customer service, data entry, accounting, and content writing.
Hands-on work like construction, farming, building maintenance, and repair appears to be less risky right now.
But what we’re seeing is a lot of these high-risk jobs being laid off. People are seeing cuts, and it’s making things really hard.
The Domino Effect On Social Security
This creates a domino effect for Social Security.
As AI replaces jobs:
- Workers lose income
- Payroll tax revenue may drop
- The trust fund has to fill a bigger gap
That causes the trust fund to shrink faster and ultimately expedites those benefit cuts that hurt low-income retirees the most.
The Social Security Administration’s Office of the Chief Actuary has warned that faster-than-expected job losses from new technology could result in lower payroll tax revenue than projected.
That could be devastating because those trust funds could be depleted as early as 2032 or 2033.
Right now, incoming payroll taxes are not sufficient, so the system pulls from the trust funds every month to make sure everyone receives their benefits. When those trust funds are gone, projections suggest benefits could drop to about 77 cents on the dollar.
If automation significantly reduces payroll tax revenue, the amount payable could potentially be even lower than that.
Why Low-Income Retirees Are Most At Risk
Of course, this is going to hit low-income families the hardest.
A lot of people on Social Security are already living on razor-thin monthly budgets. They simply cannot afford any reduction in benefits.
Wealthier retirees may have 401(k)s, pensions, or other sources of income. But many low-income Americans rely almost entirely on Social Security to survive.
Real-Life Examples
Let’s talk about how this might look in real life.
Maria is 58 and works in medical billing—a job that is increasingly being handled by AI software. If her position is eliminated in the next few years, she could lose seven years of payroll tax contributions and face reduced Social Security benefits when she retires. She has no pension and minimal savings.
On the flip side, consider James. James is 67 and receives $1,400 per month in Social Security.
If the trust funds run out, a 23% benefit cut would drop his benefits to about $1,078 per month, which is below the federal poverty line. He also relies on Medicaid and other benefits, and that reduced income may not cover his expenses.
Could AI Also Create Jobs?
Of course, there are a lot of people saying that AI will create new jobs.
History does show that technology disrupts and creates opportunities.
- Assembly lines eliminated factory jobs but built the auto industry.
- E-commerce hurt many Main Street stores but created logistics, tech, and delivery careers.
- A decade ago, “content creator” wasn’t really a job, but today it supports millions of people—including me and our team.
So there is a chance that adaptation could help offset some of these losses.
For example, we may see new roles like:
- AI maintenance and repair
- AI ethics and oversight
- Human-centered services requiring empathy and trust
I even saw an interesting example recently. A platform called Rent a Human AI allows real humans to offer services that AI agents can’t complete.
In some cases, AI systems automate work but then need to hire a human to finish tasks they cannot handle. It’s a creative workaround that shows how humans may adapt.
Possible Policy Solutions
There are also policy ideas that could help mitigate the damage.
Some of the options being discussed include:
- Taxing AI companies
- Raising or removing the payroll tax cap
- Universal basic income proposals
And, of course, entirely new AI-era jobs may emerge over time.
However, in the short term, there is a definite Social Security crisis that already existed—and AI may exacerbate it.
What You Can Do Right Now
I wanted to create this video to explain those headlines because they can be really scary. I also wanted to break down why this is happening and why it’s important to talk to lawmakers about it.
Social Security is incredibly critical to so many of you, and I want to make sure it’s preserved as much as possible.
I don’t work for the government, but helping you stay informed and encouraging people to speak up can make a difference.
Here are a few quick action steps.
First, nothing is changing today. This is a potential future problem.
You can check your Social Security statement or your My Social Security account to see your projected benefits and your earnings history.
If you’re currently working, it may be a good time to build skills in more AI-resistant fields like:
- Skilled trades
- Caregiving
- Human-centered roles
If you’re on Medicare, it’s also a great time to call our sponsor Chapter and ask any questions you have about your Medicare coverage.
And finally, you can contact your representatives and tell them you want Social Security protected. Ask them what they plan to do before 2032 or 2033 arrives and benefits are potentially impacted.
Disclaimer: The views and opinions expressed in the content on this website are solely those of the content creators and do not necessarily reflect the views, opinions, or positions of the Social Security Administration, Medicare, Chapter, or its affiliates. Chapter makes no representations or warranties regarding the accuracy, completeness, or reliability of the information provided. All content is intended for informational, educational, or entertainment purposes only and should not be interpreted as official positions of the Social Security Administration, Medicare, Chapter, or its affiliates. Chapter disclaims any liability for actions taken based on this content.
If you need assistance with Medicare, please reach out to Medicare, your local State Health Insurance Program (SHIP), your current Medicare insurance agent/broker/plan, or contact our Medicare partner, Chapter, at 417-319-2139 or visit their website at https://lirlinks.com/chapter. Chapter: Memoir, Inc. d/b/a Chapter is a privately owned, data- and technology-enabled advisory service helping older Americans navigate retirement. Insurance agency services are provided by Chapter Advisory, LLC, a licensed health insurance agency and wholly owned subsidiary of Memoir, Inc. In California, Chapter Advisory, LLC does business as Chapter Insurance Services (Lic. No. 6003691).Chapter and its affiliates are not connected with or endorsed by any government entity or the federal Medicare program. Chapter Advisory, LLC represents Medicare Advantage HMO, PPO, and PFFS organizations as well as stand-alone prescription drug plans with Medicare contracts. Enrollment depends on the renewal of those contracts. While Chapter maintains a comprehensive database of Medicare plans nationwide and assists in searching all options, Chapter has contracts with many, but not all, plans. Therefore, Chapter does not offer every plan available in your area. Chapter recommends plans even if they are not directly offered through Chapter. For complete Medicare plan options, please visit Medicare.gov, call 1-800-Medicare, or contact your local SHIP office.
