The Future of Retirement: Mortgage Debt and Smaller Social Security Payments?

Social Security has been working for 91 years. Over these nine decades, the retirement experience has changed a lot. Today’s over-60 crowd is working longer and harder, for one thing. Largely gone are the days when housing expenses tapered off with age.

Paid off your mortgage? Congrats! But insurance premiums along with taxes on a property’s rising value might be keeping you tied to your desk. And you are one of the fortunate ones. Nearly a third of 80-somethings still make mortgage loan payments! Almost unheard of in prior generations.

More of Our Retirement Benefits Are Going to Mortgage Lenders

Today, 17 million seniors are above the poverty line because of Social Security payments—which they worked for. Nearly 24 million depend on Social Security for the majority of their household income. And a good deal of that income goes toward keeping a roof overhead.

The average retiree gets $2,086 monthly from Social Security. Consider that the deed holder with a paid-off mortgage still has to pay $629 in housing costs.

Now, consider how many people are still paying on their mortgages. Four in every ten people aged 65+ have debt secured by their homes. And that number is rising.

So is the dollar amount of debt these homeowners are carrying. A six-figure mortgage balance is not uncommon these days for older adults.

And again, it’s not only the mortgage companies these older adults need to pay. It can cost $50K to make a bathroom accessible, for instance.

And over the most recent five years:

• Electricity bills have surged by about 50%.

• Property taxes have gone up more than 30% across the states.

• A homeowner’s insurance policy costs 72% more!

But cost-of-living adjustments made by Social Security have helped to offset inflation, haven’t they? Not even close. Those increases track overall consumer prices—not the expenses specific to older adults.

In fact, Social Security won’t even be able to send out full payments six years from now unless something is done about a looming shortfall.

Is the Future of Social Security Really in Jeopardy?

It depends on action by the federal government. Here’s the reality:

• With the boomers slowly leaving the full-time workforce, fewer workers are paying taxes into the benefits programs.

• In 1983, Congress bought time for Social Security by hiking the full retirement age from 65 to 67.

• In 2021, Social Security’s total costs began to outpace its income.

• Social Security is on track to use up all its reserve funds by late 2032.

• The government will still be taking in payroll taxes, but with reserves gone, only about 78% of normal benefits will be available for retirees. A typical senior-led household would lose out on hundreds of dollars per month.

This is a bipartisan problem. Both Joe Biden and Donald Trump signed laws that compromise Social Security. The latest is the One Big Beautiful Bill, signed last year, which affects the solvency of both Social Security and Medicare by cutting annual taxes that fund them by some $30 billion. (The 2026 annual Social Security and Medicare trustees report, released this June, says Medicare Part A hospital funds will pay full benefits only through mid-2033.)

Headed in the Wrong Direction: Let’s Make a Turn

Even now, Social Security won’t cover costs for most older adults. As Realtor.com® points out, retirees in 40 states need to come up with money—often thousands of dollars each year—in addition to their benefit payments.

Let’s face the music. The top earners are seeing their incomes rise much faster than the rest of us are. Yet income above $184,500 isn’t taxed for Social Security. It’s time to stop buying time and start meaningfully taxing high earners. For the sake of our hard-working deed holders and our population as a whole, it’s high time we headed in the right direction.