I’m a Financial Expert: 4 Ways To Protect Yourself Now Against Future Social Security Cuts
For many Americans, Social Security is a bedrock of retirement. They count on that money to help ensure a comfortable retirement, or at least make sure they account for certain essentials. Established in 1935, Social Security has persisted for nearly 90 years, making it seem as if these funds will be here for the future generations who will also need them.
However, the ability to tap into Social Security is actually far from certain. According to a 2023 report from the Social Security Board of Trustees, the trust fund that fuels Social Security could be depleted by 2033. While recent reporting from outlets like AP suggests that the trust fund would be unable to pay full benefits starting in 2035, offering only 83% in benefits, it’s still essential that people start preparing now to potentially receive smaller payouts.
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The prospect of getting diminished Social Security payouts is daunting. But there is good news. According to Doug Roller, owner of Crossroads Financial Group, there are some simple, everyday tasks that can help you save more and prepare for retirement, even if you’re confronted with Social Security cuts.
Make a Budget
One of the best ways you can prepare for forthcoming cuts to Social Security is actually good old-fashioned financial advice applicable to almost any situation: Start budgeting and live within your means.
Adhering to a budget not only helps you live more frugally in the here-and-now and pad your savings for retirement, it also prepares you to live on smaller Social Security payments. As Roller explained it, when these potential cuts come, you’ll already know how to live on a tighter budget.
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Max Out Retirement Plan Contributions
If you know the story of the ant and the grasshopper, then you know the value of building up your savings for winter – or in this case, retirement. You’d rather be the industrious ant who has their grains stored up early than the grasshopper left scrounging for resources once it’s too late.
To not be left in the cold once it’s time to consider retirement, Roller suggested maximizing contributions to your retirement plan as soon as possible. “By doing so, you can build up your retirement savings more rapidly and reduce reliance on Social Security income,” he said.
Delay Claiming Social Security Benefits
People who are in a position to delay claiming their Social Security benefits should do just that to help stretch the amount they’ll receive every month.
“By waiting until full retirement age or even later, you can increase the amount of your monthly benefit, which can help mitigate the impact of any future cuts,” said Roller.
Diversify Your Sources Income
As you live leaner and strategize your savings, you can also have more in your retirement coffers by broadening your income streams. Whether that means looking for a side hustle or a part-time job, or exploring other retirement accounts, such as IRAs or 401ks, Roller said that you should plan to diversify your sources of income beyond Social Security. He also shared that you can look into investing or rental properties to provide additional financial security.
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This article originally appeared on GOBankingRates.com: I’m a Financial Expert: 4 Ways To Protect Yourself Now Against Future Social Security Cuts
