A new budget forecast showed that while the authority will balance the books in the current financial year, more savings will be required by 2021 to cope with an "uncertain" funding outlook.
Savings of more than £100m have already been made.
A financial management report which will go before the council's cabinet next week states: "The funding outlook for the medium term is still uncertain however it is anticipated that the Council will need to identify a further £20m-£25m savings by the end of 2020/21 on top of the £117m savings already delivered, so it is important that we maintain our excellent track record of robust active budget management and maximise the position in 2018/19 which will assist in future years.
"The capital programme totals £74.6m which includes all approvals since the budget was set. At the time of compiling this report projected spend was 98 per cent of the budget allocation."
The council said that this financial year it used £800,000 of its centrally held contingency fund to stay within budget, leaving £4.8m available for emergencies to cover unforeseen costs, such as exceptionally harsh winters and natural disasters.
It has also made £7.6m savings to balance the 2018/19 budget, with the aim that senior managers will make further improvements where possible by April.
Councillor Lee Carter, the council's cabinet member for finance, said: "The cabinet has worked closely with the council’s senior management team to sustain the position of staying within budget – we have always taken a proactive approach to our financial management and kept a sharp eye on likely future developments.
"Of course there are pressures – Children’s Safeguarding and Early Help continues to be a key area of focus and there are a number of strategies under way to reduce costs and deliver savings.
"A cost improvement plan is in place, as is also the case with adult social care.”
The report also stated an additional investment of £2.9m was required in Children’s Safeguarding and Early Help to meet current levels of need within the community.
Financial benefits to the council have included £2.2m relating to active Treasury Management work and £600,000 relating to early delivery of benefits ahead of schedule from the council’s £50m Growth Fund investments.
It added that Telford & Wrekin has "an excellent track record of robust active budget management” which needs to be maintained to meet future challenges.
The report is due to be discussed by the cabinet next Thursday.
In February the council blamed significant changes in the way the local government finance system will operate from 2020/21 for a "very uncertain" outlook, but since then the amount of extra savings needed has fallen from £33m to, £20m-£25m.