New Retirees Be Warned: The Government Shutdown Could Affect Your Social Security

A looming government shutdown should worry most Americans — especially those counting on government-provided services. An average of 69 million people receive Social Security benefits every month, and many of those millions may understandably feel nervous about a potential halt in federally funded services. With that said, it can be helpful to understand more about the possible shutdown — and how the United States budget works — before stoking additional fear. A battle over spending is at the heart of the potential government shutdown, which is set to kick in at midnight on September 30, 2025. If Republicans and Democrats can't agree on a funding deal by then, especially on healthcare spending, the U.S. government will come to a halt. And, since neither side has shown any sign of budging on their demands — or even engaging in meaningful dialogue — this shutdown is likely.

Luckily, Social Security is mandatory spending for the government every year, not discretionary spending. Since the funds for Social Security come from payroll taxes, Social Security benefits are free from the major impacts of a government shutdown. Also to note for retirees and soon-to-be retirees, Medicare is also protected from halting during a shutdown. However, while Social Security benefits will remain, and already active recipients can expect their benefits like normal, others might not be so lucky. In fact, recently retired and would-be retirees looking to start their Social Security benefits payments during the shutdown will likely face significant delays and extended wait times thanks to a reduction in staff.

There are a variety of potential slowdowns and headaches in store for Social Security beneficiaries during a government shutdown, even if their Social Security benefit funds are safe. Per the SSA's contingency plan, around 15% of staff will be furloughed, or sent home without pay, during the shutdown. Temporarily losing 6,197 people in the SSA workforce could severely impact procedures — or at least make for a longer lag in processing times. Also, per the plan, the SSA will stop any activities unrelated to benefits payments. This means department services like benefit verifications, Medicare card replacements, overpayments processing, and earning corrections will all cease.

Everyone receiving benefits should be aware that the cost-of-living adjustment, or COLA increase, may also be impacted. A lot has happened to Social Security since the 2025 COLA was announced, and the 2026 COLA update would normally be announced in October 2025, after the Labor Department shares Consumer Price Index data. However, if the shutdown happens, the CPI will be delayed past the usual October 15 deadline, delaying the COLA announcement. While this might seem like a nonstop list of bad news for retirees about to start their paperwork, or those worried about a correction they need to make, it's important to remember that things will eventually happen as they should, even if that means it happens much slower than normal. Remember to be patient with local SSA employees, and make sure you have as much of your own supportive documentation as possible in uncertain times.