1 Social Security Move That Could Make or Break Your Retirement

A whopping 85% of retired Americans say they rely on Social Security benefits, according to a recent survey by The Motley Fool. Of that group, 40% say they depend completely on their monthly checks in retirement.

Because Social Security makes up a considerable amount of income for many older adults, it's wise to ensure you're making the most of your benefits.

Fortunately, there are steps you can take to maximize your checks. There's one move in particular that could potentially make or break your retirement — and it only takes a few minutes.

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How to check your future benefit amount

One of the most important steps you can take as you're preparing for retirement is to check your estimated benefit amount.

For most people, Social Security alone won't be enough to retire. But when you have an idea of how much you can expect in benefits, it will be easier to determine just how much you'll need to save on your own.

The sooner you check your benefit amount, the better. Saving for retirement takes time, and if you find that you need to save more than you expected, it's better to know now, while you still have time to prepare.

To check your estimated benefit amount, you'll first need to create a mySocialSecurity account, if you haven't already done so. From there, you can log in and check your statements, which will provide an estimate of your future benefits based on your real earnings.

A few important things to consider

Once you know your estimated benefit amount, there are a few other factors to keep in mind to ensure you're making the most of Social Security:

Your estimate assumes you'll file at your full retirement age (FRA): Your FRA is between the ages of 66 and 67, depending on the year you were born. Claiming at this age will ensure you receive the full benefit amount you're entitled to based on your earnings record. If you file before or after this age, it will affect the size of your payments.
Your benefit amount could change: Your online estimate is based on your earnings history. If your income changes substantially between now and retirement, your future benefit amount will likely change, too.
Your spouse's benefits should factor into your plans: Even if your spouse is not entitled to benefits based on their own work record, they could qualify for spousal benefits. When you know how much to expect from your own benefits and potential spousal benefits, it will be easier to determine your savings goal.

It's tough saving for retirement, but with a more accurate idea of how much to expect from Social Security, it will be a little easier to prepare.

What about future benefit cuts?

No matter how much you prepare, one curveball that's difficult to plan for is potential benefit cuts.

The Social Security Administration is currently facing a cash shortfall. Although the situation is complicated, the bottom line is that if lawmakers can't come up with a solution before 2035, benefits could be cut by around 20%.

To be clear, nobody knows for certain whether that will happen. Washington has proposed several potential solutions, but lawmakers have not been able to agree on anything so far — and that uncertainty can throw a wrench in your retirement plans.

While there may be nothing you can do about potential benefit cuts, you can err on the side of caution by bulking up your retirement fund. If you plan for retirement under the assumption that you'll receive 20% less than expected from Social Security, the worst-case scenario will be that you have more savings than you need if benefits aren't cut.

It's unclear exactly what the future holds for Social Security, but that doesn't mean you can't prepare as much as possible. By checking your benefit amount online and saving accordingly, you can ensure you're making the most of Social Security.

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