There are lots of strategies to maximize your monthly Social Security check. But while I'm aware of them and might try them later in life, I'm not focusing too much on optimizing my benefits when I do my retirement planning.
This isn't because I think Social Security will run out of money before I get to retire. Instead, there are much more important reasons I don't really worry about how much income my benefits will provide.
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Here's why I'm not focused on Social Security
There are a few big reasons why I'm not too concerned about trying to maximize my monthly Social Security income.
First and foremost, I realize I don't have complete control over how much retirement income my benefits will provide. The government could change the full retirement age or make other modifications to the benefits formula (such as changing the way cost-of-living adjustments are calculated). Or the Social Security trust fund could run out and an automatic benefits cut could take effect, resulting in about a 25% cut to the monthly payments before I retire.
Since the amount of benefits I end up with is in politicians' hands rather than in my own, I don't want to plan on a certain amount of money from Social Security and end up falling short. I would rather make absolutely sure I have the funds I need in my later years by focusing on what I have control over: the savings I end up with in my brokerage account.
The second big reason I'm not thinking too much about Social Security in my retirement planning is that I don't intend for those benefits to be a primary source of income in retirement. I know they are designed to replace around 40% of pre-retirement income, which means they are not enough to live on by themselves.
And I'm hoping to do a lot of traveling and really enjoy retirement, so I actually want to replace at least 100% of my income -- and perhaps even more, since I might want to really live it up as a senior.
Since Social Security is going to provide me a small portion of the money I need, I'm not spending a lot of time stressing about what strategy will let me raise this benefit by a few hundred dollars. I'd rather devote my attention to developing an investment approach, which can have a much bigger impact on the amount of money I have to enjoy life once I've left the workforce.
And the third big reason is that I'll likely want to retire before I claim my Social Security checks. This means I'll need enough money to live on without that income source. Since I'm going to need to be able to rely on my savings to support myself anyway, there's little reason to take Social Security into account when setting my savings goals.
When I claim benefits, the money will just be extra. I won't need it to live on, so the size of the checks won't make or break my ability to support myself.
Ultimately, it is smart to try to get as much from Social Security as possible (especially since I'm paying into the system), but this is simply not the focus of my retirement plan. I have bigger goals I want to accomplish that will do more for me than optimizing Social Security ever could.
