3 Reasons Why I’m Canceling Social Security For My Retirement


Social Security helps millions of older people stay afloat financially, and chances are it’ll be around for a long time, at least in some form, to do the same for future retirees. But I don’t factor Social Security into my retirement plans, and here are some specific reasons.

1. These benefits will not replace much of my income

Social Security, generally speaking, will replace about 40% of the average worker’s pre-retirement income. But I happen to earn more than the average American.

According to the Social Security Administration’s National Wage Index, the average salary in 2019 was $51,916.27, and my earnings currently exceed that threshold. But because they do, Social Security will still replace less than 40% of my pre-retirement income, and like many seniors, I expect to need a good 80% income replacement rate. to live comfortably and do the things I hope to do once I’m no longer a full-time worker. As such, I know that I will have to rely much more on my savings and other sources of income (perhaps a part-time job) than on these benefits.

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2. Benefits may be reduced

That 40% income replacement goal we just talked about for Social Security? Well, that assumes that benefits will not be reduced in the future. But for the moment, this option is unfortunately on the table.

Social Security, in years to come, will owe more money in benefits than it collects in income, as baby boomers stage a mass exodus of the labor force and too few replacement workers are entering. The program can draw on its trust funds to fill this financing gap, but only for a certain time. Once these funds run out, which is currently expected to happen as early as 2035, older people on Social Security could be waiting for a 24% reduction in benefits. If that were to happen, it would make Social Security an even less robust means of income replacement for me.

3. New fonts might leave me with a lower edge — or none at all

Currently, Social Security is available to seniors at all income levels. Now, I hope that if I save diligently and make sacrifices during my working years, I will retire with a good amount of money. But who knows if the rules will change to exclude retirees with access to a certain level of income from Social Security or from receiving full benefits?

There’s already a proposal on the table to do means testing for Social Security, and if that happens, high earners will face a reduced benefit or, potentially, no benefit at all. Now, to be clear, there’s no guarantee that such a proposal will pass, and it’s too early to know what income thresholds will come with this arrangement. But it’s a chance I’d rather not take, which is why I focus on padding my savings as much as possible.

In the absence of a crystal ball, it is impossible to know what Social Security has in store. But one thing I To do I know that right now there are too many unknowns surrounding these benefits for me to feel comfortable relying on them. And that’s why as part of my retirement planning, I don’t rely on Social Security at all. If I end up making money out of it, that’s great – I think I can use that money for travel, entertainment, or other extras. But delisting Social Security actually helps me feel like I have more control over my retirement. Because I don’t rely on these benefits, I’m more motivated to save as best I can. And also, I don’t need to worry every time bad news hits the Social Security front.


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