Concerned About Potential Impact of President Trump's Social Security Strategies on Your Retirement? Implement These 4 Preventive Measures Immediately.
In the winds of change, President Donald Trump is making his mark. Yet, he hasn't eliminated Social Security benefit taxes as promised just yet, but his term is still in its infancy. Some seniors are eager to see this tax go, yearning for more cash in their pockets now. Others, however, express concern about how this move might impact the program's potential financial shortfall.
Regardless of policy changes, ordinary Americans often feel powerless when it comes to Social Security policy. But fear not, there are four steps you can take immediately to bolster your financial security, preparing you for any future developments with the program.
1. Save prudently
If you're not yet drawing Social Security, it's essential to save as much money as feasible for your later years. It's not always easy, but even a few dollars set aside each month can make a difference. Keep in mind, you may have to relinquish a chunk to the taxman in retirement, but the majority remains yours to spend as you wish. A more substantial nest egg will improve your likelihood of maintaining financial stability during your golden years, even if Social Security undergoes cuts down the line.
2. Select your claiming age strategically
You're eligible for Social Security at 62, but delaying till your full retirement age (FRA) results in claiming your rightfully earned benefit in full. Your FRA depends on your year of birth, and currently, it ranges from 66 to 67 for today's workers. Claiming too soon shrinks your monthly checks by up to 30%, while deferring boosts your checks until you reach 70. However, is delaying worth it for you? If you have a short life expectancy or scant retirement income, signing up early could be the wiser choice. On the other hand, if you're in good health and have decent savings, waiting to apply may yield a larger cumulative benefit.
To help guide your decision, create a my Social Security account. This tool provides an estimate of your benefit at every potential claiming age, enabling you to plan accordingly and determine how much additional income from other sources you'll need to cover retirement expenses.
3. Consider part-time work in retirement
Those unsure if their savings will last might want to consider keeping a part-time job during retirement. It will provide you with a steady paycheck to supplement your personal savings and Social Security benefits. If this doesn't appeal to you, consider phasing into retirement instead. This entails gradually reducing your work hours over time, enabling you to enter retirement completely at a later stage. Your retirement will be shorter and less costly as a result.
4. Explore other government benefits
If retirement challenges leave you financially strapped, you might qualify for other government aid, depending on your income. Supplemental Security Income (SSI) supports the disabled, the blind, and low-income seniors, providing a monthly stipend of up to $967 for an individual or $1,450 for a couple. Additionally, you might be eligible for Medicaid to help cover healthcare costs or Supplemental Nutrition Assistance Program (SNAP) benefits. Remember, each program has unique requirements, so familiarize yourself with these details before submitting an application.
While you may not need all of these tactics now, the future of Social Security is uncertain. Keeping these options in mind gives you plenty of wiggle room if you ultimately run into financial difficulties.
In the context of retirement planning, many individuals are concerned about how potential changes in Social Security policy might impact the program's financial shortfall, especially when it comes to issues related to finance. To mitigate any potential financial challenges, it's recommended to explore various strategies, such as saving prudently, selecting your claiming age strategically, considering part-time work in retirement, and exploring other government benefits like Supplemental Security Income (SSI) and Medicaid. These steps can help ensure financial stability during retirement, even if Social Security undergoes cuts in the future.
