Social Security Cuts May Be Coming. Here's What I'm Doing to Make Sure They Don't Mess Up My Retirement

The Social Security Trustees Report that comes out every year isn't the sort of thing the typical American reads. But because I write about Social Security on an almost daily basis, I tend to read it thoroughly.

In a nutshell, what you really need to know is that Social Security faces the possibility of a broad 22% benefit cut in the coming years. The reason is that the program's primary revenue stream, payroll taxes, is expected to keep declining due to a shrinking workforce.

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Now I'm a little skeptical about the idea of benefit cuts. Social Security has faced financial challenges in the past, and Congress has never allowed the program to reduce benefits on a broad level.

But past results don't guarantee future ones. I can't say with any amount of certainty that Social Security cuts aren't coming in the near term. And because of that, I'm taking steps to make sure they don't ruin my retirement. You may want to do the same.

How I'm coping with potential Social Security cuts

My plan to deal with Social Security cuts is simple. I'm aiming to reduce my reliance on those monthly checks by saving as well as I can for retirement.

The way I see it, if I can manage to save enough for retirement to cover all of my essential bills, I can use Social Security as leisure money. Those monthly benefits can pay for things like a health club membership, concerts, and travel.

Now I'd like to be able to stay busy in retirement to my heart's content. But if Social Security ends up paying me less than expected, so be it. As long as I'm not reliant on those benefits to do things like put a roof over my head, keep the lights on, and eat, I'm less worried about potential cuts.

I'm also willing to be flexible

Another way I'm coping with potential Social Security cuts? I'm keeping my retirement plans flexible.

I already have a picture of the sort of house I'd like to own in retirement. But if it's not in the cards, I won't be stubborn about it and stretch my budget uncomfortably.

Similarly, I picture myself dining out often in retirement, namely because I enjoy trying new foods and restaurants. But if my budget can't support that, I'll dine out less often and not cry about it. It's that simple.

I'm also open to working in retirement in some capacity. In fact, my preference is actually to keep writing if robots don't completely take my job away by then.

If that happens, I'm open to doing other things. Walking dogs is a far cry from what I do now. But if someone wants to pay me $15 or $20 an hour to hang out with puppies and get exercise, I'm not going to complain about it. And I figure even a modest amount of supplemental income could help make up for smaller Social Security checks.

All told, I'm admittedly not super worried about Social Security cuts. I have to believe that Congress would not allow a 22% reduction without pulling out all the stops first.

But I'm also making sure I have a solid plan to deal with those cuts, just in case. And you should have one, too.

Your plan can look similar to mine or different. If you don't want to subject yourself to a job but are willing to make spending cuts, for example, that's certainly a viable approach. Just make sure there's some sort of backup plan in the works in case you don't end up getting to collect your Social Security checks in full.

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