Millions of retirees rely on Social Security to get by during retirement. It’s a helpful boost, but Social Security was never meant to be your one-stop shop for income. It was designed to be part of a “three-legged stool” alongside pensions and personal savings.
But times have changed. Pensions are disappearing, and savings often fall short. In fact, 28% of retirees rely solely on Social Security, according to a Motley Fool survey.
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The idea of depending entirely on Social Security doesn’t sit well with me. That’s why I’m taking control now by building retirement accounts and creating passive-income streams. By doing that, I’ll have plenty of options for how I want to spend those Social Security checks when the time comes.
It’s tough to predict exactly how much I’ll collect in Social Security by the time I retire. A lot depends on factors like when I decide to claim benefits and what my highest 35 years of earnings look like. Since I’m still decades away from full retirement age and haven’t hit my peak earning years yet, my future Social Security benefit amount is far from set in stone.
That said, I’m not flying blind. I like to keep tabs on my estimated benefits by checking my Social Security statement every year. If you haven’t already, you can create an account at www.ssa.gov to view your personalized statement. Just remember, these numbers are based on the system as it works today. It could look completely different 20 to 30 years down the road.
That’s why I’m not counting on Social Security to carry the weight of my retirement. With news that Social Security’s trust funds could be depleted by 2035 and potential benefit cuts on the horizon, I’m focused on building my own financial safety net.
My goal is to use Social Security as the fun money for hobbies, family experiences, or giving back. But if it makes sense, I wouldn’t mind using it to pay some bills and let my other money keep growing in investments. Either way, I plan to have options and won’t be forced to use Social Security to keep the lights on.
To be clear, I’m not dismissing Social Security. Sure, the program is facing financial challenges, and lower benefits for retirees could be a possibility. But I save and invest as if Social Security won’t be there because I’d rather have extra money than scramble for it in retirement.
