Why You Should Still Calculate Social Security Into Your Retirement

Social Security Changes You Can Expect Over Next Several Decades


As a financial planner, my job is to guide clients to the best possible decisions about their money and financial strategy. That often means helping them separate fact from fiction so they can decide on reason, not fear. One place where fear and emotion run rampant is Social Security. New clients routinely tell me that they don’t expect to see a dime from Social Security, despite decades of paying into the system.

That angry assumption is understandable but based more on fear than fact.

Social Security's Lifespan

While it’s true that Social Security is a financial train wreck, and Washington has so far lacked the courage to fix it, everyone reading this article will almost certainly receive a Social Security check once they reach retirement age. The size of that check does remain to be seen.

Social Security’s income is expected to exceed its costs through 2019, according to the program’s own analysts. After that, if the government fails to act to increase revenues, Social Security has enough interest income and cash reserves to cover its deficits until 2034. If Congress still hasn’t done something about the shortfall, Social Security will still collect enough in payroll taxes to pay retirees 75 percent of their monthly benefits until 2090.

Social Security and Politics

Critics charge that Social Security is actually in much worst shape than we’ve been told because the program’s analysts only look 75 years ahead when calculating Social Security’s unfunded obligations.

Democratic Vice Presidential candidate Senator Tim Kaine (D-VA) is among those who have called for more in-depth and transparent analysis of Social Security.

Kaine is the rare politician who has been willing to address Social Security reform. Most elected officials steer clear of the issue for fear of alienating older voters.

In fact, President-Elect Donald Trump has said only that he would preserve Social Security and focus on cutting down fraud. 

Will Your Social Security Benefit Be Impacted?

Washington will eventually have to make some hard decisions to preserve Social Security, most likely a combination of a higher retirement age, increased payroll taxes and a change in benefits, perhaps with wealthy Americans receiving smaller checks.

But Social Security isn’t going away anytime soon, meaning not in the next several decades.

My advice: continue to count on that monthly Social Security check when you calculate your retirement income, especially if you are in your 50’s or 60’s. If you want to play it safe, figure on receiving just 75 percent of your current expected monthly benefit.

You’ll probably get the full amount of your Social Security based on when you file, but lowering your expectations will make you more honest than most members of Congress! 

Of course, that’s not a high threshold to meet.

Social Security and You 

Social Security was never meant to fully fund American's retirement, so hopefully planning to cut back won't change your plans for a happy retirement. That said, if you'd prefer to maximize the Social Security benefits that you paid into for so long, my company offers a .

Everyone's financial needs are unique, and there are many strategies you can employ when determining how best to handle your Social Security benefits. 

There are many articles on this site alone which can help you with planning out your Social Security strategy. Here are a few to help get you started: