Like most people, I'll get Social Security benefits when I retire. But Social Security isn't playing a central role in my retirement planning. I'm not spending much time thinking about when I'll claim benefits or even factoring in the income I'm likely to get from my retirement checks.
Here are a few big reasons why I'm focused on other things.
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Social Security benefits are limited and largely out of my control
One of the biggest reasons why I'm not focusing too much on Social Security benefits is that too much is out of my control when it comes to this retirement income source.
See, lawmakers can make changes to Social Security at any time if they can get a majority to support the modifications. And chances are good there will be some legislative action before I get to full retirement age (FRA) since the Social Security trust fund will run short in 2034 and an automatic benefit cut would have to go into effect without new laws. I can't anticipate what might happen to my promised benefits, so I don't want to count on having income come in and find myself disappointed.
Another big issue is that Social Security is only designed to replace about 40% of pre-retirement income, which is less than half of what I'm expecting to need since I intend to travel a lot as a retiree.
While I can increase my Social Security benefit if I wait beyond full retirement age to claim it, the most I can do is raise my standard benefit by 24%. And that's if I wait until 70 to claim my first check. That's a nice increase, but the amount of extra money I could get for waiting many years to claim benefits isn't so substantial that it's likely to make or break my retirement security.
Here's what I'm doing instead of focusing on Social Security
Rather than devoting much energy to how my Social Security income will provide for me in retirement, I'm focused instead on maximizing my savings.
See, while there's a cap on how big my Social Security benefits can get, there's no actual limit on how high my retirement account balance can go. If I work hard, save more money, and spend time picking the right investments, I could theoretically end up with millions invested and enough to produce much more income than Social Security will ever offer.
I also have a lot more control over how much money I end up with when it comes to my investment account rather than my Social Security account. Unlike Social Security benefits, which could be cut at the whim of politicians, the money in my retirement plans is mine, and I get to decide how much of it to withdraw at specific times (especially with funds in my Roth IRA, which are not subject to required minimum distribution rules).
Ultimately, if you want to have the most secure retirement possible, you're likely better off focusing on the role your savings will play rather than Social Security. Putting in the effort to build a solid portfolio and to regularly transfer money to your retirement nest egg is going to have a far bigger payoff than spending endless time trying to guess whether you'll be better off with a smaller Social Security check claimed at 62 or delaying your claim for months or years to boost that benefit a bit.
