Here’s what I’m doing to plan for Social Security cuts. My strategy can also save your retirement.

If you’ve been reading about Social Security, you’ve probably heard that the program’s latest Trustee Report wasn’t very encouraging. That report confirmed that Social Security is staring at a financial shortfall as older workers leave the workforce in droves, depriving the program of much-needed payroll tax revenue.

Social Security has trust funds it can use to continue scheduled benefits over a period of time. But once those trust funds run out, benefit cuts will be on the table.

The time for this is not so far away. Using the depletion date of the program’s combined trust funds, the Trustee’s most recent estimate has benefit cuts occurring as early as 2035.

Of course, benefit cuts are not a given. There is a chance that lawmakers will find a way to prevent them as they have done before.

But I cannot accept that this will happen. I think a smarter move is to assume I won’t get as much Social Security as I’m currently entitled to. But I’m also taking steps to ensure that a smaller monthly Social Security check isn’t a problem.

My game plan

Since I have the privilege of writing about retirement planning for a living, I know quite a bit about it. I’ve known for a long time that relying heavily on Social Security for retirement income is a less-than-stellar plan, even if benefit cuts are taken out of the equation.

But given the potential for those cuts and the generally unpredictable future of Social Security, my retirement game plan is simple: I’m aiming to have access to enough income that I can retire without Social Security at all .

Since the program is not in danger of disappearing completely, it could be argued that I am going to an extreme. But the way I see it, I’d rather ditch Social Security and save enough to function without it. That way, any monthly benefits I collect will be extra money that I can use for whatever purpose I want, whether it’s rescuing dogs (I really can’t get enough) or taking classes on topics that I’m interested.

But let’s go back to savings for a minute. In short, I’m saving as much of my income as possible after paying my essential expenses. I’m currently housing my savings jointly in a solo 401(k) account and a brokerage account.

The reason I don’t have all my money in the 401(k) is that there may be penalties for withdrawing the funds before I turn 59 1/2. I hope to continue working well beyond that age, but, well, I don’t know.

I also have a small health savings account (HSA) that I hope to keep in retirement and use to cover health care expenses. I can spend the money now, but I’d rather save it for later and let the money grow tax-free.

The story continues

Other than that, I’m trying to set myself up to continue working in retirement to some extent. I think this is necessary not only for financial gain, but for the sake of mitigating boredom. (I’m certainly not a “couch on the couch watching TV for hours” kind of person.)

My current career — writing — will hopefully be useful if robots don’t take over my job. But I’m also exploring backup careers, such as getting my license to become a Certified Financial Planner.

Don’t let Social Security cuts destroy your retirement

The idea of ​​getting less money from Social Security than expected can be unsettling, frustrating and downright scary. That’s why I’m trying to remove Social Security from my personal retirement equation. And doing the same can be a good thing for your financial and mental health.

If you still have a good number of working years ahead of you, aim to increase your retirement plan contributions so that you are less dependent on Social Security. You may also want to sit down with a financial advisor to design a personal savings plan that accounts for Social Security cuts.

Of course, lawmakers can come to the rescue and make it so that Social Security can continue to pay benefits in full. And if that happens, it won’t change my strategy. I’m aiming to be able to support myself without Social Security. If I can do that, every monthly benefit I’ll collect goes well toward making my retirement that much more worthwhile.

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Here’s what I’m doing to plan for Social Security cuts. My strategy can also save your retirement. was originally published by The Motley Fool