Financial Experts Have Urgent Advice for Retirees Who Depend on Social Security

If you're near retirement and Social Security is supposed to do most of the heavy lifting, this is the moment to check the plan before your paycheck stops.

On October 14, 2026, the Social Security Administration announced a 3.6% cost-of-living adjustment for 2027. That increase may raise benefits, but it doesn't resolve the program's long-term financing shortfall, or guarantee your check will cover your retirement expenses.

Panic won't help. Understanding benefits for seniors, your claiming age, savings, debt, and work timeline might matter more than you hoped.

The warning

Financial experts recommend checking both your income and your financial cushion before retiring. David Peterson, Fidelity's head of advanced wealth solutions, says a sound financial plan starts with understanding all your income sources and expenses.

In 2024, Rob Williams, then managing director of financial planning and wealth management at the Schwab Center for Financial Research, recommended keeping emergency cash available and considering waiting until full retirement age, or potentially age 70, to claim Social Security if you're healthy and can afford to wait. Together, their advice offers a practical starting point: Know what's coming in, what's going out, and how you'll cover a surprise bill.

The 2027 COLA may raise monthly checks, but it only adjusts the benefit you already qualify for. It doesn't fix a budget that depends on one check covering housing, food, insurance, taxes, transportation, and medical costs.

That's the practical warning. If Social Security is your main income source, even a modest surprise expense could force choices you'd rather not make later.

Your benefit check math

The average retired-worker benefit was $2,085.98 per month in July 2026, based on the Social Security Administration's July Monthly Statistical Snapshot. If your estimated benefit is close to that average, compare it with your actual monthly bills before you retire.

Your own number matters more than any average. Your Social Security statement should show your estimated benefits from age 62, the earliest claiming age, through age 70. Check the future earnings assumption, too. Your estimate may assume you keep earning a similar amount until you claim, so stopping work earlier could change the projection.

This closes the first gap in the plan. If your expected check is lower than your basic bills, the issue already exists. Treat it as a current budget problem, not a future maybe.

Trust fund risk

The 2026 Trustees report projects that reserves in the trust fund paying retirement and survivor benefits will be depleted in late 2032. Continuing income would then cover 78% of scheduled benefits.

A commonly cited combined projection puts depletion in 2034, with 83% payable. However, that calculation treats the retirement and disability funds together, which would require a change in law.

Depletion would not mean Social Security disappears. Tax revenue would continue coming in, but it would be insufficient to pay all scheduled benefits unless lawmakers make changes.

For your plan, the safer move is to avoid assuming Congress solves everything in the exact way you prefer. A smaller emergency fund, a higher debt load, or an early claiming decision could leave you with less room to adjust.

Claiming age

You can claim retirement benefits as early as 62, but claiming before full retirement age usually reduces your monthly benefit. Full retirement age is 67 if you were born in 1960 or later.

Waiting beyond full retirement age could increase your benefit through delayed retirement credits, up to age 70. That trade-off is about whether you need the check now, how long you expect to work, your health, and whether you have other income.

If you have no savings and no paycheck, claiming early can feel like the only option. If you still have a job or part-time income, waiting could give your future self a larger base check. However, if you claim before full retirement age and keep working, earnings above the annual limit can cause some benefits to be withheld. At full retirement age, SSA recalculates your benefit to account for months when benefits were reduced or withheld because of excess earnings.

Work years

Social Security calculates retirement benefits using your highest 35 years of indexed earnings. If you have fewer than 35 years, zeros can count in the formula.

An extra year or two of work could increase your benefit if it replaces a zero or a lower-earning year among the 35 years used in your calculation, after earlier earnings are adjusted for wage growth.

This is also where the plan becomes less abstract. Working longer could help in two ways at once: it might improve your benefit estimate, and it could give you more time to pay down debt or build cash before retirement.

Expense squeeze

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, a government inflation measure, not a custom calculation of your personal spending pattern. If your biggest costs rise faster than the COLA, your budget could still feel tighter even when your check rises.

This matters most if you rent, carry credit card debt, have a car payment, or expect higher out-of-pocket health costs. Those are real gaps. They're monthly bills that compete directly with your Social Security check.

A quick test can help. Build a retirement budget using your estimated Social Security benefit, then subtract your fixed expenses first. If little is left for food, prescriptions, home repairs, or emergencies, the shortfall is already visible.

Backup moves

Before you leave work, look for one or two changes that could lower your dependence on Social Security. That might mean delaying retirement by six months, shifting to part-time work, paying off a high-interest balance, or saving a small cash cushion.

You don't need a perfect retirement account to improve your odds. Even a modest emergency fund could keep a car repair or medical bill from turning into credit card debt.

Review taxes, too. Depending on your total income, part of your Social Security benefit could be taxable. That doesn't mean you should avoid saving or working, but your take-home retirement income may be lower than the headline benefit.

Bottom line

If Social Security is the centerpiece of your retirement plan, recent benefit and trust fund numbers make one thing clear: your backup plan deserves attention before you stop working so you make the right moves.

Check your Social Security statement, price out your real monthly bills, and compare several claiming ages. If there's a gap, look first at the moves you still control, such as working a little longer, cutting high-interest debt, or building a cash cushion.

The goal is to help you retire with fewer surprises and a check that has less weight to carry by itself.

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