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IBM Employees and the Changing Future of Social Security

“Given the potential for Social Security reforms to reshape retirement income, IBM employees should regularly revisit their savings strategies and consider a broader range of planning tools to adapt to evolving benefits trends.” – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

“IBM employees can strengthen their retirement outlook by staying updated on Social Security developments and by integrating flexible planning strategies that account for possible changes to future benefits.” – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

The possible insolvency of the Social Security Trust Fund and its potential impact on future retirement benefits
Proposed legislative reforms, including raising the full retirement age and alternative funding strategies
Retirement planning actions IBM employees can consider to prepare for potentially reduced Social Security support

The financial situation facing Social Security continues to worsen. Without major reforms—such as raising the full retirement age (FRA), adjusting taxes, or implementing corrective policies—the program is expected to become insolvent within the next decade. ¹ The following five data-driven insights highlight the urgency for IBM employees and others to reconsider their retirement outlook:

Trust Fund Insolvency by 2034

According to the Social Security Administration’s 2024 Trustees Report, the Old-Age and Survivors Insurance (OASI) Trust Fund is anticipated to be depleted by 2034. ² At that point, only about 77% of scheduled benefits would be available using existing payroll tax revenue. ³ This development means those at IBM nearing retirement should review income expectations and long-term planning.

Shrinking Workforce-to-Retiree Ratio

In 1960, 5.1 workers supported each retiree. ⁴ By 2025, the ratio is expected to drop to 2.7 and further decrease to 2.1 by 2035. ⁴ This demographic trend places additional pressure on the system, meaning current employees at IBM may experience increased unpredictability in their retirement timelines.

Persistent Annual Deficits Since 2021

Since 2021, Social Security has paid out more in benefits than it has received in tax revenue, ⁵ causing the ongoing depletion of Trust Fund reserves. IBM professionals should be aware that without reforms, these annual shortfalls are likely to increase.

Life Expectancy Outpaces Retirement Age

When the program started in 1940, average life expectancy at age 65 was 13 years. As of 2025, it is over 18 years. ² However, adjustments to the FRA have not kept pace, adding long-term financial pressures. IBM retirees should consider this trend when reviewing how their pension and Social Security benefits may work together.

Automatic 23% Benefit Cuts in 2034 Without Reform

If no legislative action occurs, federal law requires that all Social Security benefits be reduced by 23% beginning in 2034. ² These changes would affect millions—including many IBM employees—making it necessary to plan for potential reductions in retirement income.

Reform Proposals from Policymakers

Multiple proposals to address Social Security are being discussed, with the most debated change involving adjustments to the FRA. The House Republican Study Committee recommends gradually increasing the FRA from 67 to 69 by 2033. ⁶ For a typical IBM worker, this could translate to $3,500 less in annual benefits over a 30-year retirement—approximately a 13% overall reduction.

Senator Rand Paul has proposed a more aggressive plan, calling for an FRA of 70 or 71, arguing that this aligns with longer life expectancies and addresses long-term fiscal demands.

Impact on Physically Demanding Jobs

If these proposals move forward, up to 257 million Americans could be affected. ⁷ IBM team members in operational or field-based roles may find it difficult to work into their late 60s or 70s due to health limitations. In such cases, some may turn to Social Security Disability Insurance (SSDI), which could further strain the system.

Even though increasing the FRA to 69 would reduce benefits, it would only delay insolvency by one year—from 2034 to 2035—according to the Congressional Budget Office.

Arguments Supporting an FRA Increase

Proponents point to:

- Demographic strain: With fewer workers supporting more retirees, the program timeline needs to be reviewed.
- Extended longevity: Aligning FRA with life expectancy could help maintain balance in the program.
- Fiscal restraint: A higher FRA may lower overall outflows and reduce future tax increases or benefit reductions.

Critics Raise Equity and Health Concerns

Opponents note the regressive impact of these reforms:

- Occupational health disparities: Many physical laborers or lower-income workers—including some at IBM—face health challenges that make extended work lives difficult.
- Income-based longevity gaps: Delaying the FRA disproportionately affects those with shorter life expectancies and poorer health.
- Alternative funding ideas: Proposals include increasing payroll taxes for high earners or removing the wage cap on Social Security taxes.

Implications for Retirement Planning

IBM employees may benefit from adopting a cautious retirement approach:

- Increase contributions: Build additional savings in IRAs or IBM 401k plans to help decrease reliance on Social Security.
- Diversify accounts: Roth IRAs and HSAs may provide added flexibility if Social Security payments are reduced.
- Plan conservatively: Expecting lower future benefits can help form a more robust retirement plan.

Key Takeaways for IBM Employees

Fact or Proposal	Principal Implication
OASI Trust Fund depletion by 2034	Only 77% of benefits may be paid through payroll tax revenue.
Worker-to-retiree ratio falling to 2.1	Higher financial pressure on active workers to support retirees.
Annual deficits since 2021	Trust Fund reserves are being used to cover shortfalls.
Lifespan at 65 now about 18 years	Benefit duration is 50% longer than when the program began.
23% benefit cuts by 2034 without reform	Legally required reductions unless funding changes are made.
Raising FRA to 69–70	May reduce benefits by ~13%, only delays insolvency by one year.
Additional ideas	Raising wage cap, increasing payroll taxes, revising formulas.

Final Thoughts

Social Security’s future is uncertain, and workers at IBM should remain attentive as reforms progress. Raising the full retirement age remains a point of debate; while it may help stabilize the system, those most impacted may be the least prepared for change. A broader solution will likely include some combination of tax adjustments, changes to the FRA, and new benefit structures.

On January 5, 2025, the Social Security Fairness Act repealed the Windfall Elimination Provision and Government Pension Offset, raising benefits for nearly 3 million public employees—including teachers, firefighters, and police officers—by $360 to $1,190 per month. While this provided meaningful relief, it also increased demands on the Social Security Administration’s processing capacity.

For IBM employees, staying informed about these proposed changes is as important as monitoring industry developments. Taking proactive steps—such as diversifying savings, setting realistic expectations, and engaging in thoughtful retirement planning—can help individuals better navigate the uncertain horizon.

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Sources:

1. CBS News. ' Social Security's insolvency date is now a year earlier ,' by Aimee Picchi. June 19, 2025.

2. Social Security Board of Trustees. “The 2024 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.” Social Security Administration, May 2024, pp. 7–21, 28–32, https://www.ssa.gov/oact/tr/2024/tr2024.pdf .

3. Social Security. ' Status of the Social Security and Medicare Programs .' 2025.

4. Huntington. ' What Does the Future Hold for Social Security and Medicare? ' 2024.

5. Pew Research Center. ' What the data says about Social Security ,' by Drew Desilver. May 20, 2025.

6. MSN. ' New Social Security rule proposal would raise retirement age to 69 for millions of Americans ,' by Andrea Arlett Nabor Herrera. 2025.

7. House Committee on the Budget. ' House Republican Budget Plans Would Cut Social Security Benefits .' 2025.

Other Resources:

1. Van de Water, Paul N. “What the 2024 Trustees’ Report Shows About Social Security.” Center on Budget and Policy Priorities, 7 May 2024, https://www.cbpp.org/research/social-security/what-the-2024-trustees-report-shows-about-social-security .

2. Anderson, Julia. “How Would Raising the Social Security Retirement Age to 69 Affect Your Benefits?” Kiplinger, 8 Apr. 2024, https://www.kiplinger.com/retirement/raising-the-social-security-retirement-age .

3. Congressional Budget Office. “Raising the Full Retirement Age for Social Security.” Congressional Budget Office, Nov. 2024, pp. 1–5, https://www.cbo.gov/publication/58905 .

4. Noguchi, Yuki. “If Social Security Not Fixed, Retirees Face Automatic Cut in 2033.” NPR, 6 May 2024, https://www.npr.org/2024/05/06/1249406440/social-security-medicare-congress-fix-boomers-benefits .

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