First Person: What If Social Security Doesn’t Survive?

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I've written a lot about Social Security lately. This is largely due to its importance to so many current and future retirees. The program can make or break many retirees' situation in their golden years. Whether it's the difference between traveling the world and just staying home and being able to eat and pay the utility bills, many retirees count upon or at least rely upon Social Security in retirement.

An MSN Money article on the topic noted that, "…Elise Gould, director of health policy research at the Economic Policy Institute, called Social Security the nation's most effective antipoverty program.

"Without Social Security," she said on the EPI's website, "an additional 8.3% of Americans, or over 25 million more people, would fall below the SPM (Supplemental Poverty Measure) poverty threshold."

While sadly I have to agree with this point due to the ineffectiveness of most other government antipoverty programs like SNAP and unemployment, it makes me wonder what I would do if Social Security didn't survive the next few decades or at least didn't survive in its current form.

Start planning now

Maybe one of the best things I can do to combat the insecurity of Social Security is by starting my "what if" scenario now for the gradual demise of the program. By visiting the government's website at, I can become better acquainted with the information relating to potential future benefits. I can look at estimated benefits, review previous years' earning data, find out about how benefits and benefit increases are calculated as well as review the health of the program as a whole. I can also review potential changes to the program that could affect my future benefits such as the one currently slated to occur in 2033 and that would reduce benefits to 75 percent of what their current estimates.

Create other sources of regular income

Probably the best thing to do to ensure against the potential demise of Social Security is ensure that other sources of income are there to help carry the load in retirement. In this way, whether Social Security stands strong or falters, retirees are prepared.

My personal plan to help myself in this area is through dividends. When I left my previous role in the hospitality industry, I rolled my 401(k) into an IRA where I pooled my asset allocations into one central dividend reinvestment fund. In this way, I earn monthly dividends (that currently yield about 6 percent annually) that are reinvested into the fund, building my share total. Upon retirement, I will hopefully be able to draw this dividend amount as a monthly check, much like Social Security, while allowing the fund balance to continue to earn for me.

Extend work-related income sources into retirement

A recent CNBC article explored how self-employment could help stretch retirement savings. While it could be a risky proposition for some depending upon what the role is and how much of an investment is required to get started, this may not be a bad idea for people like me who already have experience in the role or who can get started with little or no initial investment.

According to CNBC, "A recent survey by AARP found 10 percent of workers ages 45 to 74 plan to start a business and 15 percent workers in this age range are already self-employed. Some start a business due to a job loss, others had already retired but weren't ready to fully stop working. On average, self-employed workers in their 40s or 50s may spend nearly two decades working for themselves, the AARP study found."

Personally, I think that continued work-related income in retirement -- albeit maybe on a lesser scale -- could be a great hedge to Social Security uncertainty as long as I'm able to participate in work on my own terms and in a relatively risk-free way.

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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 advice of any kind. 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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