15 Things You Can Do to Be Less Dependent on Social Security

Many seniors end up heavily reliant on Social Security once they retire. But in the coming years, the program may be forced to cut benefits if lawmakers don't manage to address its financial shortfall. And even without benefit cuts, Social Security income will only go so far. If you want to avoid financial stress during retirement, here are some steps you can take to become less dependent on Social Security.

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The more of a nest egg you bring with you into retirement, the less you'll need your Social Security income. Therefore, it pays to aim to max out your IRA throughout your career. At a current annual maximum contribution of $6,000 for workers under 50 and $7,000 for those 50 and older, it's a far more attainable goal than maxing out a 401(k).

ALSO READ: Stressed About Paying Taxes in Retirement? Here's Why a Roth IRA Could Be the Best Savings Tool for You

You may not be able to max out a 401(k) on an annual basis given that today's limits are $20,500 for workers under 50 and $27,000 for those 50 and older. But it still pays to put as much money as you can into a 401(k). And if your employer offers a match, be sure to contribute enough to snag all the free money you can. The higher your balance, the less reliant on Social Security you'll be.

Healthcare could end up being a big expense for you in retirement -- one that eats up a lot of your Social Security income. A good bet, therefore, is to sock away money for healthcare spending in an HSA, or health savings account. These accounts let you contribute during your working years and carry funds indefinitely.

ALSO READ: Here's the Best Way to Benefit From Your HSA

The less you spend on a regular basis, the less you'll have to worry about what Social Security is paying you. Set up a retirement budget that reflects your priorities and financial capabilities. And then keep tabs on your spending to make sure you're staying on track.

Retirement is a time to treat yourself, whether it's dinners at your favorite restaurant or trips you've been dreaming of taking. But it's important to put a lot of thought into those purchases. If you limit yourself in a reasonable manner, you may find that your nest egg withdrawals can more than cover your costs, thereby putting less stress on your Social Security benefits.

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The less you spend on healthcare, the less you'll have to worry about spending down your Social Security payments. It pays to assess your Medicare plan choices each year to ensure that you're selecting the right coverage. Switching plans as your needs change could result in a lot of savings.

ALSO READ: 3 Strategies to Make the Most of Medicare

If you're able to bring home a paycheck from a job, you won't have to depend on Social Security as much. Plus, working is a great way to stay busy at a time when you may find yourself bored or restless. And a part-time job could serve as a nice social outlet to boot.

Do you love baking, crafting, or painting? You may be able to turn those hobbies into an income stream. And the more money you bring in, the less reliant on Social Security you'll be.

Many retirees end up making the decision to downsize their homes. But if you'd rather stay put in a larger property, you may want to consider renting a portion of it out. You can use that income to pay your housing costs -- or whatever bills you need to cover.

ALSO READ: How to Know When It's Time to Downsize Your Home

Being a landlord takes work. But if you're up for the challenge, an income property could be a great cash source for you in retirement. And the more rental income you bring in, the less you'll have to look to Social Security to pay your bills.

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Dividend stocks are a great way to generate ongoing passive income. The payments you receive will be yours to cash out as needed so you have more money at your disposal. And if you're doing well financially, you can always reinvest your dividends to grow your portfolio even more.

ALSO READ: Investing in Dividend Stocks

REITs, or real estate investment trusts, are companies that operate different types of property. The upside of investing in REITs is that these companies are required to pay at least 90% of their taxable income to shareholders as dividends. That's income you can depend on instead of Social Security.

Municipal bonds don't always pay as much interest as corporate bonds. But they're a great choice for retirees because municipal bond interest is always tax-exempt at the federal level (sometimes at the state and local level, too). And that interest income could be a cash source you look to regularly.

ALSO READ: Buying Municipal Bonds for Retirement? Beware This Pitfall.

There are many discounts available to seniors, from reduced fares on public transportation to lower-cost entertainment. It pays to do some research and see what bargains you're eligible for. The less money you spend, the less reliant on Social Security you'll be.

Maybe you spent many years supporting your adult children in their 20s while they established careers and got on their feet. If your children are now in their 30s or 40s and doing very well professionally, don't hesitate to accept financial gifts if they can afford to make them. Think of that money as repayment for going above and beyond the call of parental duty.

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There's nothing wrong with assuming that Social Security will play an important role in your retirement finances. But make sure you have other income sources and savings options at your disposal. We don't know what the future has in store for Social Security, but it's a smart bet to assume that benefits will shrink in the future -- just in case.

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