I'm Not Counting on Social Security to Bankroll My Retirement. Here's Why -- and What My Plan Looks Like Instead.

Key Points

• Many retirees today depend heavily on Social Security.

• Because benefits may be cut, I can't take that chance.

• I also know Social Security won't provide enough income for me, even if cuts end up being preventable.

• The $23,760 Social Security bonus most retirees completely overlook ›

Millions of older Americans today collect a monthly benefit from Social Security. And without that income, many would struggle to pay their bills.

I feel bad for people who rely heavily on Social Security for retirement income, because the reality is that the program may be facing sweeping cuts in less than a decade. Seniors in that boat risk serious financial upheaval if lawmakers allow those benefit cuts to go through.

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But even if Social Security isn't cut broadly, I still refuse to count on it for retirement income. Instead, I'm taking steps to set myself up to manage without it.

Why I won't count on Social Security in retirement

The reason I refuse to fall back on Social Security has nothing to do with a fear of the program going away. I've been writing about Social Security for many years, and I know that the worst-case scenario on the table is benefit cuts -- nothing more.

Even those benefit cuts are not guaranteed. Lawmakers recognize that they'd be looking at a massive poverty crisis among retirees if that were to happen, so I'm confident they'll take steps to either prevent cuts, or minimize the pain there.

Rather, the reason I won't rely on Social Security for retirement boils down to the fact that even without cuts, it won't replace enough of my income to make my expenses manageable. For an average earner, Social Security will take the place of roughly 40% of preretirement wages. That's not a lot.

I'm not picturing a particularly extravagant retirement lifestyle. But even so, I don't think replacing 40% of my pay will come close to cutting it. So for that reason alone, I can't just tell myself I'll sit back and let Social Security come to my rescue as far as income goes.

My plan for retirement

My retirement income plan is simple: I'm hoping to save enough on my own to cover my essential needs, and then turn to Social Security as bonus money -- income I can use for activities and things of that nature.

To pull this off, I'm saving aggressively during my working years. That means maxing out my 401(k) every year I can, taking on extra work in an effort to save outside a 401(k) as well, and keeping some of my bigger expenses low to allow room for savings.

For example, I'd love a bigger house with more closet space. Who wouldn't? But instead of upsizing and doubling my mortgage payments, I'm staying put to make sure there's room in my budget to fund my retirement account month after month.

This isn't to say that I don't ever splurge. But I pick my splurges carefully, because I have such an important savings goal I'm working toward.

Even though Social Security is not at risk of going away and cuts may be preventable, I still don't think it's a good idea to retire on those benefits alone. If you agree, and you'd rather have more peace of mind going into retirement, make every effort to save as much as you can. It's going to take work, but the peace of mind should be more than worth it.

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