Financial advisors should not plan on their clients receiving their full Social Security benefits when they develop their retirement plans, according to Joel Redmond, a Syracuse, N.Y.-based senior financial planner and senior vice president at Key Private Bank.

Instead, because the system already is stressed and it is not known how it will be fixed, advisors should plan on their clients receiving 75% to 80% of their projected benefits, Redmond said in an interview.

It is estimated that Social Security Trust Fund reserves and reserves for disability benefits will be depleted by 2034. “The worst-case scenario is not that Social Security will go broke,” Redmond said. “Rather, payments will likely experience a haircut.”

The impact of Covid-19 on benefits will not be great, he noted, although there will be some changes because of lower payroll tax revenue being collected, increased disability payments being made, an acceleration of early retirement benefits, and reduced interest accumulating on trust fund reserves. He added that no current benefits are being affected by the impact of Covid-19 on the economy.

While the Social Security system already was under pressure before the pandemic hit, the Social Security Administration has outlined numerous ways it could be made whole for at least the next 75 years.

The proposals include reducing the Cost of Living Adjustment by 1%; changing benefit amounts; gradually raising the full retirement age to 70 and raising the earliest date that benefits can be received from 62 years of age to 64 years; raising the Social Security tax that employers and employees pay; or raising income tax rates to provide more money.

“We have the resources to save the system,” Redmond said, adding that each scenario has different levels of political palatability and varying levels of possible public acceptance.

“The best thing advisors can do is manage their clients’ expectations about their benefits,” he said. “This has the added benefit of encouraging people to save more if they think Social Security is going to cover less of their retirement costs.”

Those anticipating receiving benefits soon should talk with an advisor to determine their options so they can go to the Social Security Administration with details of their benefits already in mind, Redmond said. The Social Security agents, for the most part, do what they are asked to do rather than offer advice.

“With advance knowledge, beneficiaries can leverage their knowledge to make rational decisions,” he added.