10 Things To Do Now if You’re Worried Social Security Won’t Be Enough

Many people count on Social Security to help fund their retirement years, but will that be enough to actually cover all of your needs? If you are not sure, now is the time to check your retirement readiness, no matter how old you are.

The average Social Security benefit check was $1,907 in January 2024. It’s likely to increase from now until you retire, but that will only keep up with inflation, thanks to the Social Security Cost of Living Adjustment (COLA).

If your current expected monthly benefit is not as high as you need it to be right now, it’s time to consider a few ways to supplement it. If Social Security is not enough for your financial needs, take these steps to boost your retirement finances now.

Check your current retirement readiness status by creating a Social Security account. Then, log in and see what the Social Security Administration believes is your likely monthly income based on your earnings record.

The Social Security Administration website provides an easy-to-use tool to help you create a fairly accurate estimate based on how long you plan to work and whether you will reach your full retirement age before you begin to collect benefits.

Before you know if you need to supplement your benefits, determine exactly how much you’re spending now. Most people hope to pay off debts like mortgages and credit card debt before retirement. For now, keep them on your balance sheet if you’re not likely to pay off those debts.

Knowing your current spending will help you see if you need to make adjustments. That could mean finding additional ways to save or earning more money.

To increase savings for retirement, find a way to supplement your income with a side hustle. Consider the skills you have that someone may pay for, such as consulting work.

Also, consider other opportunities, such as a part-time delivery job or working from home as a virtual assistant during your time off. Devote all of those extra earnings directly to retirement savings.

When you no longer need a three-bedroom home or 2,500 square feet, consider reducing your living space as much as possible without limiting your lifestyle.

By moving into a smaller home, condo, or apartment, you may reduce your overall expenses. You will probably lower your costs for maintenance and utilities as well.

Put the money you’re saving directly into your retirement savings plan.

The cost of living varies depending on which area of the country you live in. If your current hometown is expensive, you may want to consider relocating to a place with a lower cost of living for retirement.

Relocating may already be in your retirement plan. If so, be sure to research the communities you’re considering to understand how much it costs to live there.

For healthy people who want to keep active, taking on or maintaining a part-time job could be an option to pad your Social Security. Whether you work 10 hours a week or 20, the goal is to work less but still have some money coming in to support your needs.

If you plan to retire early, before you reach your full retirement age, don’t over-earn beyond the cap the Social Security Administration sets for your income. That could cost you money.

Talk to a financial advisor about upping your retirement contributions. You may qualify for more than one type of retirement account, including 401(k), IRA, and other tax-advantaged accounts.

If you are invested in a 401(k) plan at work, be sure you are contributing the maximum you’re allowed. And don’t forget the employer match if that is part of your plan.

Just remember that when you withdraw from these accounts in retirement, you will be paying taxes on that income.

Beyond tax-advantaged accounts, investing in mutual funds, individual stocks, bonds, or certificates of deposit will all help your retirement savings. The S&P 500 has had an average annual return of 10.16% over the past 20 years.

Again, a financial advisor can help you develop a good investment portfolio to last your lifetime. Look into index funds, real estate investment trusts (REITs), dividend stocks, and bonds as ways to build wealth.

You may have thought about cutting your monthly spending, but now you have the financial motivation to do so. Work to reduce your expenses throughout the month to the lowest level possible.

To see how much you really spend each month, track every penny for a month to see where you can cut back. Begin with the fixed costs — mortgage, utilities (including cellphones), groceries, etc. — and then add up other money you spend. You may see easy ways to cut back.

For starters, eat at home more and take advantage of weekly grocery specials. If you pay a monthly fee for a gym and don’t use it enough, drop the membership and get your exercise for free by walking or running with friends.

Pay down as much debt as you can as soon as you can. That reduces the amount of money you need during retirement and lowers the overall interest costs significantly.

The sooner you tackle debt, the less you end up paying for it. At the same time, you’ll need to create and maintain a budget to help you avoid using credit again. Doing this now will reduce your costs over the long term, help you put more money into retirement savings, and lower the amount you’ll need.

Finding ways to earn extra money now to help build a bigger nest egg is an important strategy for anyone planning to retire in the next few years.

If you’re not sure where you stand for retirement, take the time right now to prepare. Estimate what your expenses may be when you retire, what debts you may still have, and what your Social Security benefits are likely to be. Then, you can figure out what steps you need to take now to be sure you will have a stress-free retirement.