First Person: My Confidence in Social Security Is Starting to Waver

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After seeing the Congressional Budget Office's (CBO) recent numbers on Social Security, I have to say my confidence in this fund is starting to waver. Over the years, I've been realistic about Social Security and my possibilities of ever getting it. I've always kind of figured I'd get some sort of retirement benefit from Social Security, just not full benefits. However, I'm starting to wonder if even this milder expectation was putting the cart before the horse so to speak. Therefore, I'm starting to make some adjustments to my retirement plan.

Downgrading Social Security Expectations

For some time now, I haven't had expectations of getting my full estimated Social Security benefits. Several years ago, I decided to downgrade my expectations for such benefits by 25 percent. This meant that when I ran the numbers for estimated benefits at the Social Security Administration's website (, I would then multiply my benefits number by .75 to account for the partial benefits amounts that the Social Security Administration expects to start paying out in several decades (around 2032 at this point, but that fail date seems to change each year) should there be no changes to the current system. Now however, I'm also going with estimates based on "current dollars" rather than "future dollars" to take the uncertainty of possible cost of living adjustments out of the equation as well.

Taking on More Responsibility for Retirement

While I've been a long-time believer in people taking responsibility for their own retirement -- above and beyond what Social Security provides in benefits -- I'm now taking even more responsibility for my retirement. While I do factor Social Security into my future retirement plans, I now don't count on those amounts. This way, I have an understanding of what my Social Security benefits could be, but I'm not relying upon them. This helps push me to work harder at developing and building a retirement plan that is sustainable with or without Social Security.

Increasing Diversification

Part of my retirement plan includes increased diversification. The apparent possibility of Social Security not being a reliable source of income in retirement shows just how unreliable certain asset or income expectations can be. If I can't rely upon our nation's government for consistency in such matters, how can I rely upon things like the stock market, banks, or anyone else for that matter?

This tells me that the more I can diversify and spread my money over a variety of risk levels and asset types, the better I can protect my retirement. Therefore, my plan aims to move not only into diversified stocks and bonds, but into things like cash and more liquid assets, physical assets like land and silver, and even things like continuing to build my self-employment venture into something that I could carry with me as an income earning source in retirement.

Increasing Tax Deductions

I know this might sound crazy to some people, but as a self-employed individual who doesn't have an employer sponsored retirement plan, Social Security kind of acts as my default retirement plan. Therefore, for many years, I didn't mind paying more in employment taxes since it was kind of akin to paying more into a retirement plan, a plan that seemed fairly reliable and that would pay me more down the road if I paid more into it now. This means that I didn't always take all the business deductions I was allowed.

Again, I know it sounds crazy. However, now I'm taking full credit for my business-related tax deductions since I don't want to pay more into a retirement plan that might not be there -- or not be there in the amounts I'd hoped -- when I hit retirement age.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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