Can You Really Retire Without Social Security?

Let’s be honest: Social Security isn’t as strong as it once was. The trust funds that support the program are perilously close to depletion and benefit cuts are a possibility if the government doesn’t do something to fix that. Rather than worry about what’s going to happen, some people plan for a retirement without it. But is that actually feasible?

That depends a lot on your timeline, how much you’re saving, and what kind of lifestyle you hope to have in retirement. Here’s what you need to know to find out if you’re on track.

How much will your retirement actually cost?

In order to know if retirement without Social Security is feasible, you first need to know how much your retirement will cost. You can use your current annual expenses as a baseline, but remember that things will change between now and retirement. You might spend more on some things, like healthcare and travel, and less on others, like child care. So you may have to adjust your estimated spending in each category to reflect these changes.

You also need to think about how long your retirement will last. You probably already have some idea of when you’d like to retire, so you can use that as a starting point. Then, you must estimate your life expectancy. It’s best to plan on the long side unless you have a serious health condition you believe will shorten your life.

Once you’ve made these estimates, you can plug your information into a retirement calculator to figure out how much you must save per month and in total. It’s helpful to use a 3% annual inflation rate as your estimate and a 5% or 6% estimate for your investment rate of return. Your money may grow faster than that and inflation may not rise by 3% every year. But this way, you should be able to keep on track for your goal even in tough economic times.

Your calculator should tell you how much you must save per month to reach your goal. But you may not have to do this all on your own. If you qualify for a 401(k) match, you can subtract this from your own monthly contribution. For example, if you decide you need to save $500 per month for retirement, but you receive a $2,400 annual 401(k) match — or about $200 per month — then you only need to set aside $300 per month on your own.

Hopefully, you come up with a number you can work with. But if not, you may have to make some changes to your plan. Consider working longer or getting a part-time job in retirement to reduce the strain on your nest egg. Or, if you have the cash on hand, you could increase your retirement contributions.

But Social Security will probably still be there for you

It’s totally fine to plan for retirement without Social Security if doing so makes you feel better, but it will likely still be there for you. The trust funds may be nearing depletion, but the bulk of the program’s financing comes from the Social Security taxes that all workers pay on their incomes. This isn’t going away, so the program will still provide you with something, even if you’re decades away from retirement.

Benefit cuts are a possibility, though. Your checks might not go as far in retirement as retirees’ benefits do today. The latest Social Security Trustees Report suggests that after the trust fund reserves are depleted in early 2035, the program will only be able to pay out about 80% of scheduled benefits. It’s possible the government comes up with some sort of fix before that happens, but there’s no way to know for sure.

If you are including Social Security in your retirement plan, try not to be too dependent on it. Make sure you have plenty of personal savings to cover most of your expenses, and come up with a withdrawal strategy that will help your savings last.

Review your retirement plan each year and make changes as necessary if you find that you’re off track. It doesn’t have to take a long time, and when you’re finally ready to retire, you’ll be glad to have a solid plan in place.

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