If you’re worried about a cut in Soꦆcial Security benefits denting your retirement savings, there are steps you can take to make up for the shortfall.

While many advisors say that it’s unlikely that Congress will allow the Social Security trust fund to run short of money, 🅘they think it’s s൲till important to prepare for a worst-case scenario where benefits get cut.

“If you wait too long because you don't want to tackle the problem, kind of like what Congress is doing now, the changes that you're going to have to make within your life are going to be a lot more drastic,” said Brian Schmehil, managing director, Wealth Management at The Mather Group. 

According to a 澳洲幸运5开奖号码历史查询:recent projection by the Congressional Budget Office, the Social Security trust fund is expected to be exhausted by 2034. After that, monthly benefits will be reduced by 23%.

For low-income earners, 澳洲幸运5开奖号码历史查询:Social Security can make up a large portion of retirement income. The Social Security Administration estimates that, for retirees 澳洲幸运5开奖号码历史查询:receiving benefits in 2023 at full retirement age, those benefits will make up 70% of retirement income for very 澳洲幸运5开奖号码历史查询:low earners and 28% for high earners.

F🐲igure Out How Much The Shortfall Will Affect You

When advisors help their clients with planning, they calculate their client's expected Social Security benefits. You can use an . To understand how a potential cut would affect your benefits, you’💯ll want to reduce that amount by anywhere from 20% to 50%, according to experts.

Historically, retirement was thought of as a three-legged stool consisting of pensions, personal retirement ಞsavings,🍰 and Social Security.

“Pensions are being eliminated and Social Security for future generations is unsure,” Jamie Bosse, a financial planner at CGN Advisors said. “So that l🍨eaves personal savings to carry all the load.”

How To Invest To Make Up For The Shortfall

To make up for the lost benefits, you may have to save more, work longer, reduce your spending, or consider getting a side gig, experts say. Though it may be tricky to do so if you’re already st🅺ruggling financially, said Sch♈mehil.

Bosse says people should aim to invest 10% to 15% of their income towards retirement every year, with the goal being 20%. She suggests increasing your 澳洲幸运5开奖号码历史查询:savings rate by 1% to 2% every year or every time you get a🎃 raise🦹.

As for which accounts you should use to invest, Schemil recommends focusing on saving for retirement in the most tax-efficient way possible such as by earning your 澳洲幸运5开奖号码历史查询:employer’s 401(k) match and then contributing to investment accounts like 澳洲幸运5开奖号码历史查询:Roth IRAs, HSAs, and backdoor Roth IRAs.

Delay Social Security Benefits

Even though Social Security benefits face reductions, Paul Caylor, founder of Prudent Wealth and a CFP, suggests 澳洲幸运5开奖号码历史查询:delaying collecting benefits past full retirement age (FRA), if possible, t🉐o make tho🐈se dollars stretch for longer. 

For every year after FRA, until the age of 70, that you don’t take benefits, you’ll earn an additional 8%. That means if your FRA is 67 and you wait until age 70 to collect, your monthly benefit will be worth 24% more. But most 澳洲幸运5开奖号码历史查询:Americans would take early Social Security.