Social Security remains a crucial source of income for millions of American retirees. However, concerns about the program’s long-term solvency have many approaching retirement age feeling anxious. While the funds that help pay benefits are projected to face challenges by the early 2030s, that doesn’t mean that benefits will disappear entirely.
It does mean being proactive is more important than ever. One powerful strategy is cutting fixed expenses before retirement. Paying off your mortgage, downsizing, or relocating to a lower-cost area can significantly reduce monthly costs.
Each expense you eliminate means less income needed and longer-lasting savings. Building strong personal savings is the best buffer against Social Security uncertainty. Start by increasing your 401(k) or IRA contributions, even if it requires budget adjustments.
Aim for 15% of your income or the 2024 max: $23,000, plus $7,500 in catch-up contributions if you’re 50+.
Cutting fixed expenses before retirement
Claiming Social Security at 62 is possible, but waiting until 70 boosts your benefit by about 8% per year.
This is a strong return for maximizing retirement income. Married couples should coordinate strategies; the higher earner often benefits from delaying, while the lower earner may claim earlier if needed. Married couples have Social Security options that singles don’t.
If you’ve been married for at least 10 years, you may qualify for spousal benefits based on your current, former, or deceased spouse’s record. Understanding your options can boost lifetime benefits. Remember that even in worst-case scenarios, Social Security is still projected to pay approximately 75-80% of promised benefits.
Your goal should be to build enough additional security to weather any reduction while maintaining your desired lifestyle. By proactively planning and employing these strategies, you can safeguard your financial future and ensure a more comfortable and secure retirement. Consulting a financial advisor specializing in Social Security can help maximize your household’s total payout.
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