When I set retirement savings goals and make financial plans for my later years, I'm not taking Social Security benefits into account. I'm anticipating having plenty of savings to live on without any money from these retirement benefits, even though they're an important source of income for many seniors.
There are three primary reasons I'm not counting on Social Security as a support source. These reasons may also convince you to make your own plans without anticipating your monthly Social Security checks.
1. I'm not in control of when the rules for Social Security benefits will change
The first big reason why I'm not counting on Social Security is because the benefits program is in some financial trouble.
The program's trustees have warned the trust fund used to pay benefits will fall short as soon as 2033. That's well before I'll be ready to retire. To be clear, this absolutely doesn't mean no Social Security retirement income will come once the trust fund runs dry, as tax revenue collected from current workers will be enough to pay around 3/4 of the promised benefit amount.
However, the reality is that cuts could happen, and they would be beyond my control. Lawmakers could also make changes to Social Security to shore up its finances that would affect the benefits I'll receive. For example, full retirement age could be moved later. That would mean I'd need to either delay the start of my checks or accept a smaller monthly payment.
Because I can't anticipate exactly how much money I'll get from Social Security since the decisions affecting it will be made by politicians and not by me, I'd rather not factor in benefits as a source of guaranteed retirement income. Otherwise, I might end up counting on money and getting less than expected.
2. I may want to retire before claiming Social Security benefits
Although Social Security benefits can start as early as 62, I'm hoping to claim my benefits later in life.
That's because waiting to start benefits allows you to max out the monthly amount you get. I'd rather get fewer larger checks later in life than smaller ones earlier, and I'm also hoping to outlive my projected life expectancy — which would mean a later claim provides more lifetime Social Security income.
Since I hope to delay claiming Social Security until 70 but plan to retire well before then, I'll need enough savings to support me for many years before I begin receiving retirement benefits. Since my savings must be sufficient to cover my costs by itself for many years, I'm not counting on Social Security to pay my bills.
3. I'd rather end up with extra money than too little
Finally, the biggest reason why I'm not counting on Social Security is because I'd rather have more money than I anticipate rather than less. If I make retirement plans that ensure I have enough saved to support myself without Social Security, any money that does come from benefits checks is going to be extra.
Since money will eventually come from my retirement benefits, I'm guaranteeing I'll have more than I need by not counting on Social Security as a support source.
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