Social Security cuts? Here’s the plan you should follow to come out ahead, according to experts

The future of the United States’ Social Security program looks bleak, largely due to huge numbers of baby boomers on the verge of leaving the workforce. While there’s little chance of the program ceasing to exist, benefit cuts, which could affect millions of American, look to be a realistic possibility, with Social Security trust funds forecasted to run dry by 2035.

What, then, is the best way to plan for the future?

One piece of simple advice to plan for reduced benefits

Personal finance writer Maurie Backman has offered one piece of simple advice, which she has already been following herself for some time.

The bottom line, she believes, is to depend on Social Security as little as possible. While 15% to 20% of your annual earnings is the savings threshold most experts recommend, Backman believes forcing yourself to go a little higher is a wise move.

“What I typically do each year is set a goal of saving 25% of my income for retirement at a minimum,” she explains. “And if I can go beyond that, even better.”

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Make sacrifices for retirement

She does confess, however, that “saving at that level means having to make sacrifices in other areas of my life”.

What kind of sacrifices are we talking? That can vary greatly depending on your lifestyle and priorities.

It could mean working extra hours for more pay, living in a smaller house than you’d ideally like to, or going out for food less than you used to. There are, in theory, hundreds of ways you can cut your spending and save money.

If those numbers are making you stress, Backman claims, for reference, that she didn’t regularly deploy this strategy until she was in her 40s, once she had paid off her student loans and her child care costs had dropped.

Ways to save more money

“Go slowly” is very much her main message. “Save an extra $50 a month if that’s all you can afford. Or, try banking your raise at the start of each year”.

With benefits likely to be cut to approximately 20% at some point in the future, every little helps.

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