3 Things You Can Do if You're Worried About Social Security Cuts

If you’ve been hearing rumors about Social Security cuts, you should know that unfortunately, they’re true. This isn’t to say that benefit cuts are a given. But they’re certainly a possibility based on the way things are looking for Social Security right now.

The problem is that in the coming years, Social Security is expected to owe more money in benefits than it collects in revenue. We can attribute that to a massive workforce exit on the part of baby boomers.

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Social Security cards.

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Social Security can tap its trust funds to keep up with scheduled benefits for a period of time. But once those trust funds are emptied, benefit cuts may be inevitable.

Recent projections call for the Social Security trust funds to run dry by 2035. But that timeline could wiggle — for better or worse. So it’s important to have a plan in case benefit cuts end up happening. And if you’re worried about them negatively impacting your retirement, here are three things you can do about it.

1. Save more

Social Security was never meant to serve as your sole source of retirement income anyway. If you’re worried about benefit cuts, one good way to compensate is to bring more savings with you into retirement.

Of course, you can’t snap your fingers and magically grow your 401(k). But one strategy may be to take full advantage of your employer match, and to invest your savings more aggressively for optimal growth. With a 401(k), that could mean pulling your money out of a target date fund (a common investment for workplace plans) and moving it into an S&P 500 index fund instead.

You may also want to look at saving for retirement in a Roth IRA or 401(k) instead of a traditional retirement plan — especially if you’re not in a particularly high tax bracket right now. Getting to withdraw your retirement savings tax-free puts more money in your pocket later in life, which could help make up for smaller Social Security checks.

2. Plan to work in retirement

Many people assume that working and retirement don’t mix. In reality, working could be a great way to not only earn money, but stay busy.

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It’s a myth that you’re not allowed to earn money from a job while collecting Social Security. If you do so before reaching full retirement age, you’ll risk having some benefits withheld if you earn too much money.

But otherwise, working part-time could supplement your Social Security checks nicely if they end up getting reduced. And you may find that going to work in retirement is something you actually enjoy, especially if it allows you to be more social.

3. Delay your claim

You may be eager to sign up for Social Security once you reach full retirement age (which is 67 if you were born in 1960 or later). But for each year you delay your claim past that point, your benefits grow 8%, up until you turn 70.

If Social Security cuts end up happening, your monthly benefit at full retirement age could be reduced substantially. But if you wait until age 70 to file, you may end up with a monthly Social Security check that’s roughly the same amount as you would’ve gotten at full retirement age in the absence of a reduction.

Social Security is not guaranteed to cut benefits. But it’s something everyone should prepare for, just in case. Any of these moves are a good way to make up for missing benefits and make your retirement more comfortable.

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3 Things You Can Do if You're Worried About Social Security Cuts

1. Save more

2. Plan to work in retirement

3. Delay your claim

The $22,924 Social Security bonus most retirees completely overlook

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