As someone who's been writing about retirement planning for roughly the past decade, it's amusing to me to think back on the days when the only thing I knew about Social Security was that it was some sort of program that paid you benefits when you were older. I didn't learn about the program's many rules and nuances until I started covering the topic extensively.
These days, my Social Security knowledge is far more vast, and I'll bet I could surprise you with some of its lesser-known rules. But because I've done so much reading on Social Security, I also have a good grasp of the role the program is likely to play in my retirement.
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Social Security isn't going away
When I first started covering Social Security (and I'm talking about the very first week I wrote on the topic), I kept seeing warnings about the program going away completely. That was pretty disheartening to read.
Thankfully, I dug deeper. And based on what I know today, I can say with certainty that Social Security is not at risk of disappearing completely.
See, Social Security gets the bulk of its funding from payroll taxes. So as long as there's an active labor force, workers will continue to pay Social Security taxes on their wages, and benefits can continue.
In the coming years, Social Security is expected to get less revenue as older workers retire in droves. The program may also need to tap its trust funds to keep up with scheduled benefits.
Once those trust funds run out of money, Social Security may have no choice but to cut benefits to some degree. But the program should still be able to pay retirees the bulk of the benefits they're entitled to. So while it's a good idea to plan for Social Security cuts, there's no need to panic that the program is going away completely. That's just not on the table.
What I expect Social Security to do for my retirement
I'd like to look forward to some monthly retirement income from Social Security because I've been paying into the program since I started working. I'm confident that Social Security benefits aren't going away. But frankly, I don't expect them to play a huge role in my retirement finances -- and that's actually a good thing.
Even without benefit cuts, Social Security will only replace about 40% of a typical earner's pre-retirement wages. And many seniors need about twice that much money to live comfortably.
I do not want to have to stress about money in retirement. So to that end, I've been working my hardest to pump as much money as I can into various retirement accounts.
I live below my means, and have since my career took off so that I'm able to consistently set money aside for the future. My hope is that come retirement, any income I get from Social Security will be money I can use to do things like take vacations or perhaps adopt a few extra dogs (they're my weakness). I don't want to have to count on Social Security to do things like put food on the table or pay the electricity bill.
It helps to get the real story
Social Security really is not in danger of going away completely. I can see why you'd think that, since there's a lot of misinformation out there. Don't feel bad about believing it, since I once did, too.
But don't rely on Social Security too heavily for retirement income, either. Instead, save as much as you can so that you don't have to worry about things like benefit cuts or smaller cost-of-living adjustments when you deserve to be enjoying your retirement to the fullest.
