While social security isn’t capturing mainstream headlines, it’s a critical discussion topic among young millennials and baby boomers. But how does social security link these two different generations?
Both generations expressed concerns surrounding social security benefits during retirement. Are the benefits going to be cut or depleted entirely by the time most citizens hit retirement? It’s a very likely possibility, according to U.S. News.
Prepare for retirement without benefits
According to recent projections from the 2019 Social Security Board of Trustees, the combined funds’ reserve will be entirely depleted by 2035 – which means now is the time to plan retirement without social security benefits.
There are a few techniques that Americans should implement during their retirement planning:
- Prioritize your 401(k) – Most workers utilize a 401(k) plan, especially if their employer offers a price match. It’s an excellent defense to continue savings and receive additional contributions through their employers.
- Use retirement plans with incentives – Many retirement plans, such as IRAs or health saving accounts, offer tax incentives. IRAs specifically allow you to receive tax savings now or in the future, which helps you overall.
- Implement an annuity – Most people depend on social security for regular income during retirement. Luckily, you can use an annuity instead of social security. Annuities are contracts between you and an insurance company to provide income, planning and long-term costs.
- Claim social security early – Many retirees wait to claim benefits until they turn 66 years old, but you can claim benefits as soon as 62 with a permanent reduction in the benefit amount. It might be a great strategy to take the money and run while it’s still available.
These are only a few strategies to implement in your retirement planning; there are many ways you can increase your savings and the likelihood of a comfortable retirement. Work with a financial advisor to ensure you have the right plan for you and your future.