Have you ever wondered whether or not Social Security will be around when you retire? You’re not alone.

Many people are concerned that by the time they get to retirement, Social Security benefits will largely be defunct. Some financial sources say that this isn’t a fear rooted in reality, that Social Security will be revamped or funded in a new way to continue providing benefits long into the future. However, this isn’t necessarily true.

The Hard Truth

The 2018 annual report from the Social Security Board of Trustees indicates that Social Security trust funds will largely be depleted by 2034. But that doesn’t necessarily mean that the program itself will be shut down. All it means is that the Social Security trust will have run out of cash in its reserves – but employees continue to pay into the program each year.

So, the Social Security Administration will be able to continue to pay out what they take in each year, but nothing more. This may sound like you’re out of luck if you plan to live as a full-time retiree beyond 2034, but that’s not entirely true. The Social Security Administration estimates that, even after their cash reserves are depleted, they’ll still be able to pay out 77% of retirement benefits, and 96% of disability benefits.

How Does Social Security Work?

Social Security benefits come from a few different places:

• The 12.4% of your salary you pay into the program as an American employee (your FICA tax)
• The small 4% income tax that people receiving benefits from the SSA pay
• 9% interest earned from the cash sitting in trust funds through the SSA

Social Security pays out benefits to retirees and disabled individuals. They also pay out (reduced) benefits to surviving spouses or parents of Social Security benefit recipients who have passed away. Benefits are calculated based on a few different factors. These include:

• How long you’ve worked
• How much you’ve paid into the program over the course of your career
• The age you start collecting benefits

The SSA offers annual benefit information for people paying into the program, and it can help you to estimate how much you might receive during retirement. Keep in mind that this estimate is updated annually for a reason. Every year you keep paying into the program, the total benefits you’re eligible to receive during retirement increase.

Why You Shouldn’t Rely on Social Security

Although those estimates sound promising, it’s still not wise to completely rely on Social Security to provide you with income during retirement. The government, lawmakers, and policy advocates have been working for decades to create a “better” version of Social Security. The likelihood that a program will, someday, replace it is high. But it’s impossible to estimate when that will be, or what the new program (or revised version of the current Social Security Administration) will entail.

In the meantime, only one thing is for certain: Social Security will, eventually, run out of cash to keep paying out full benefits to retirees or the disabled. When putting together your financial plan, it’s easy to want to count on Social Security to pay you a benefit – and it likely will pay you one, even if it isn’t the full amount you had anticipated. But it’s best to make alternate plans for your retirement.

Why?

Because in life there are things you can control – and things you can’t. What happens to Social Security is outside of any one person’s control. The type of retirement savings you’re able to accumulate through your own careful planning, on the other hand, is completely in your control. Don’t count on Social Security to provide you with the majority of your retirement income. Instead, focus on creating a retirement savings plan that meets your unique goals and needs.

Creating a Retirement Plan That You Can Control

There are so many tools beyond Social Security that you can leverage to create income for yourself and your spouse or partner during retirement. A few options you might look to take advantage of are:

• Contributing to a company 401(k) – and receiving your employer’s matching contribution
• Contributing individually to a Roth IRA
• Contributing to a Traditional IRA
• Creating and funding a “backdoor” Roth IRA
• Funding your Health Savings Account (HSA) to cover medical expenses during retirement
• Taking advantage of your company’s pension

You can also work to create a retirement budget, and reduce your expenses as a retiree by paying off your debt before you retire, downsizing to have smaller living expenses, and focusing on your health right now to reduce medical expenses in retirement.