Social security is set to drain even faster. So I’m not relying on it for retirement

If you rely on banks to Social Security to fund your retirement, you may want to think twice.

New predictions from Social Security Bureau The Social Security Trust Fund indicates it will run out by 2034. At this point you can only receive 81% of your benefits and reduce the amount you are paid.

As Personal Finance Experts Those who saved enough to retire comfortably at age 40 have worked with dozens of clients to help them calculate whether they need to save now to buy retirement. Whether Social Security is reduced or eliminated, we can confidently communicate that we should not rely on this program to fully fund future costs.

monthly payment Receiving from Social Security is not sufficient to cover most costs. These payments are expected to only be reduced. Here’s how Social Security benefits work and how you can plan your retirement without relying on the future of this program.

read more: Social Security 2025: How to decide on monthly payments and maximize it

How do Social Security revenues work?

Social Security is a government-run program that pays through payroll taxes. Employees pay 6.2%, employers pay 6.2%, and self-employed people pay 12.4% in full.

Money you pay Social Security Salary Tax It’s not personal, but go directly to the current beneficiary. Savings account for you. So what you’re paying now is for the generation before you, and you’ll be paid based on what the next generation puts into the pool of money.

The amount you receive from Social Security depends on whether you are single or married, and how much you earned Your best year of 35 years And when you retire you are old. Most people can start claiming benefits at 62, but the longer you wait, the more monthly payments you make. Can be used Social Security Benefits Calculator We estimate what you plan to receive.

Does Social Security exist when you retire?

When you retire, Social Security may exist in some way, but you may not receive the full benefits offered to current retirees.

Social Security Bureau’s 2025 Annual Report It turns out that the program is likely to be able to pay 100% of its current profits through 2034, a year earlier than last year’s forecast. Retirees will then receive 81% of their scheduled benefits.

What does it look like? As of May 2025, Average Social Security Payments Retirement costs $1,950 per month. If you receive that 81%, it will drop to about $1,580 a month.

Is Social Security enough to fund your retirement?

Most people rely on social security to support their funds. Resignation savings. But no matter how frugal you are, your Social Security payments alone won’t make you enough income to cover your retirement needs. $1,950, or $1,580 if you retire after 2034 – isn’t a trivial amount, but it’s not enough, and probably not enough to cover the cost of living for your clients.

Social Security is an important part of the monthly salary of many retirees, but it should not be your only retirement plan.

Constance Craig-Mason’s National Social Security Advisor I agree. “Financial happiness isn’t just about numbers, it’s about stability and peace of mind,” she said. “Social Security should be viewed as the foundation, not the sole pillar of a retirement plan.”

Don’t rely solely on social security. Do this instead

Rather than speculating about the fate of social security, I recommend putting together your plans now Grow your own retirement fund. Even if you don’t save much, a small start is better than pushing it into the road. The preemptive procedure I took here was to plan a traditional retirement and save enough money to retire early in my 40s.

1. Check your options and establish a retirement fund

Saving money for retirement can sometimes make you feel impossible From living wages to wages And you’re struggling to buy your rent, mortgage and other essentials. My first step is not to invest any money at all. Instead, we recommend checking the options and getting your account setup so you can save it when you can contribute.
We also strongly recommend that you learn how they started to talk to people in your life who have retired or are approaching retirement age.

2. Make the most of employer-sponsored plans

If it’s your job Provides 401(k) Or other retirement plans in the match, your best bet is contributing to that account until you reach the maximum each year. This is your best bet as your employer will meet some of your contributions and help you grow your money faster. For Safe 2.0 Act Resignation Changes, Depending on when the plan is set up, if you are part-time, you may also be eligible to contribute to your workplace planning.

My husband and I focus on contributing to our sponsor’s plans before investing elsewhere. This is an automatic way to make extra money for retirement without putting too much effort. This year, I can contribute $23,500 To 401 (k). If you are over 50 years old, you can donate an additional $7,500.

3. Next open the IRA

If you reach a 401(k) maximum contribution, then aim to invest in individual retirement accounts. The 2025 MAX IRA’s donation limit is $7,000.

Whether a Ross or a traditional IRA makes sense depends on current and future estimated tax rates. Both allow you to raise your money tax-free. A Roth IRA allows you to donate post-tax dollars, but traditional IRAs are funded with pre-tax dollars and are taxed when you withdraw. Many of my clients have opened brokerage accounts on behalf of their IRAs and are not aware that they lose their hard-earned money each year.

4. Put extra money into your mortgage now

A good way to help your Social Security income and retirement funds expand even further is to eliminate sudden costs. Owning your home completely removes one of your biggest expenses. This sounds like a noble goal, but that’s possible. I focused on retaliation $300,000 in debt over three years, including my home. If so Get a tax refundjob bonuses and other windfalls will be paid on a mortgage if possible. Every bit can lower your balance.

5. If possible, reduce housing costs

If you are accepting a relocation, you can consider locations with lower taxes and housing costs and spend more money towards your retirement goals. Ten years ago, my husband and I made the bold move to leave our hometown of New York City and settle in Charlotte, North Carolina. Every year, I save tens of thousands of dollars in taxes, car insurance and living expenses.

Even if you’re not ready to travel around the country, it can make a huge difference when you consider the low-cost regions of your area. I also decided to rent it in Charlotte. The money we spent on repairing and maintaining the house freed up extra money for us.

6. Use a Health Savings Account

Healthcare is one of the biggest costs of resignation. So investing in your health now will save you money later. Get into the habit of filling tax accounts like Flexible spending accounts or Health Savings Account It helps you save on health costs. Note that although FSA accounts are provided through your employer, you can set up your own HSA.

These accounts don’t pay that much for healthcare purchases, testing, or procedures, so you can encourage them to use these funds for the healthcare resources they need to maintain healthy habits in the long term. You can then use your takeaway salary to focus on your retirement plan.

Focus on what’s in your control

You can’t accurately predict what will happen with Social Security, but you can take action right now Reduces financial anxiety About the future.
As Craig-Mason encourages, “focusing on social security benefits and wise savings strategies, intentional money management, and working together with happiness with a focus on financial alignment will help you build a sustainable and fulfilling retirement plan.

What’s the worst thing you can do? Assume Social Security covers everything. Instead, start planning today.