Many of today's workers are convinced that Social Security won't be around by the time they're ready to retire. And the good news is that such a scenario really is not on the table.
It's true that Social Security is facing a financial shortfall. In the coming years, it expects to owe more in scheduled benefits than it collects in revenue. And once the program's trust funds run out of money, benefit cuts may be inevitable.
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Now thankfully, there's a huge difference between losing a chunk of your scheduled Social Security benefits and not getting any benefits at all. And the latter situation really isn't in the cards because Social Security gets most of its revenue from payroll taxes. So as long as the country has an active labor force, the program can continue to get funded.
But if you're really worried about Social Security, then it wouldn't hurt to make a plan to retire without it. Doing so might spare you the stress of having to keep tabs on benefit cuts and the like. Here are a few steps you can take to set yourself up with retirement income having nothing to do with Social Security.
1. Build up a large nest egg
The more money you contribute to a 401(k) or IRA while you're working, the more funds you'll have available once you retire. And if you want to know the secret to building a large nest egg, it's not just investing your savings aggressively in stocks to grow wealth -- it's putting the process on autopilot.
Life has a way of throwing unexpected expenses at all of us. So if you wait until the end of the month to fund your retirement plan, you may not end up being able to make a contribution. But if you automate the process, you'll have money landing in your retirement account before you have a chance to spend it.
The good news is that 401(k)s are funded in an automatic manner. But with an IRA, you have to actively set up an automatic transfer. Taking that step, however, could be your ticket to retiring with enough money to sustain yourself outside of Social Security.
2. Make plans to work part-time as a retiree
For some people, the idea of having to work in retirement is downright unappealing. But if you're willing to work on a part-time basis, you'll have a means of generating income that will put less pressure on your savings and make up for potential Social Security cuts.
It's also worth noting that thanks to remote work and the gig economy, holding down a part-time job may not be as taxing and demanding as it once was. But if you're on board with the idea of working as a retiree, take steps during the latter part of your career to make that feasible. That could mean building or learning certain skills, or networking within your industry so you're able to consult on a freelance basis once your retirement begins.
3. Invest in assets that produce ongoing income
The assets you choose to put your money into could play a big role in your financial security down the line. If you're planning for a retirement that isn't reliant on Social Security, you'll want to focus on assets that generate steady income.
One option to look at in this regard is dividend stocks. And it pays to focus on companies with a long history of paying dividends.
Another option is municipal bonds. The benefit there is that interest income from municipal bonds is always exempt from federal taxes. And if you buy bonds issued by your home state, you won't pay state or local taxes, either.
There's really no need to write off Social Security completely in the course of your retirement planning. Even if you wind up with a heavily reduced benefit, you should have money coming in from the program nonetheless. But if you'd rather just tell yourself that Social Security won't be an option and carve out your own means of supporting yourself in retirement, then these are steps worth taking.
