Here’s How I’m Planning to Compensate for Social Security Cuts

There are millions of older Americans today who get the bulk of their retirement income from Social Security. And it’s people in that boat who may be downright terrified about the possibility of Social Security cuts.

Social Security cuts are not a given, but they’re a strong possibility. In the coming years, Social Security is expected to owe more in benefits than it collects in revenue. Thankfully, the program can tap its trust funds to make up the difference until they run dry.

But recent estimates have Social Security’s trust funds running out of money by 2035. If lawmakers don’t intervene before then, Social Security recipients could see that income stream shrink in about a decade.

Now I’m not collecting Social Security just yet. In fact, I’m actually not close to being eligible for Social Security. Rather, I’m a personal finance who’s well aware that Social Security may get cut in the future.

For that reason, I’m taking steps to compensate for Social Security cuts. Here’s what I’m doing — and why you may want to do the same.

I’m focusing on savings

If I have it my way, Social Security cuts won’t interfere too badly with my retirement finances. In fact, ideally, I’d like to be able to retire without having to rely on Social Security at all to cover my basic needs.

This isn’t to say that I don’t want the money. Rather, I’d like to try to save enough so that I can cover all of my essential expenses by tapping my nest egg. That way, anything Social Security pays me is bonus cash.

To this end, I’m working really hard to contribute money to my retirement savings every year. Some years I save 10% or 15% of my income. Other years, I’m able to do better. It depends on what my income looks like and what my household expenses amount to.

Between owning a house and a car and having kids and pets, surprise expense tend to arise. I can’t always help that, so there are some years when I do a better job of saving for retirement than others.

But all told, I can say that I contribute consistently toward retirement. And my hope is that by the time I’m eligible for Social Security, I won’t actually need the money. And if I don’t need the money, then benefit cuts shouldn’t be too much of a problem.

I’m also willing to make sacrifices

While my hope is to retire with enough savings to cover my retirement expenses in full, I don’t know if that will happen. So in addition to prioritizing my savings, my backup plan in case Social Security gets cut is to make adjustments to my lifestyle.

That could mean downsizing my spending across the board. It could mean working. Or it could be a combination of both.

It’s not so easy for me to lower my spending now because I have kids. If I were to move to a cheaper home, for example, it might mean having to pull my kids out of their school district, which isn’t fair to them. And I have to drive a minivan, which is a more expensive car to own and fuel, because I need the room.

In retirement, I expect to have the flexibility to cut expenses like housing and transportation. And if that’s what needs to happen to make up for Social Security cuts, so be it.

Don’t just let yourself wing it

While we don’t know that those cuts are happening for sure, I think for your own peace of mind, you should put together a backup plan like the one I have. It doesn’t have to look the same. But it’s important to recognize that you may not get your complete Social Security checks down the line and have a way to make up for that lost income.

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