Thinking about the future of Social Security reminds us of watching a disaster movie in slow motion. We know the two trains are going to collide or the ship is going to hit the iceberg, yet the Big Event is years in the future, approaching inexorably but at a snail’s pace. Meanwhile, those with the power to change the course of events are spending their time discussing the coming crisis rather than dealing with it. 

If we sound cynical, it’s only because the predicted slashing of Social Security benefits by one-fifth or more has been talked about for years. The Big Cut that will take place when the trust fund runs dry is now predicted to happen in 2034, unless Congress and the President act to shore up the system. Social Security is not disappearing at all, but a 20-25 percent benefit cut would still special financial disaster for millions of retirees. 

To get a picture of just how reliant people are on Social Security, we examined this new article from Investopedia, written by reporter Jordyn Bradley. We also took a deeper look at the 2024 survey by Nationwide on which Bradley’s article is based. It paints a picture of future retirees caught in a dilemma of uncertainty. Our view: getting the right financial advice has never been more essential. 

Widespread Concern as Critical Program Faces a Crisis  

In reviewing the Nationwide data for Investopedia, Bradley notes that the majority of Social Security recipients said their current benefits don’t cover their basic needs. That means any reduction in those benefits would be a serious setback. 

“The future of Social Security is on shaky ground,” she writes. “If Congress fails to reform the program, the funds that pay out benefits to millions of recipients will be depleted by 2034.  

Survey Responses Show a High Degree of Fear, Paralysis 

While Bradley’s article didn’t address specific survey responses in the Nationwide report, we were struck by one particular graph. Essentially, the question being asked was, if future Social Security benefits were to be cut by 25 percent, what action would you take? Respondents could list more than one answer. 

We were mildly encouraged to note that roughly one-quarter of respondents indicated that their retirement income from other sources could make up the shortfall. Moreover, about one in five respondents said they planned to boost retirement savings to compensate. 

However, there’s a darker side in the survey. Nearly a fifth of those responding said they planned to take no action at all, “because whatever I do is hopeless.” Another significant group of respondents (14 percent) were taking no action because “I don’t know where to start.” Many simply plan to keep working indefinitely, their hopes for retirement fading away. 

A Small Hiccup Could Pose Big Problems  

“To illustrate just how challenging things are for retirees,” the Investopedia article notes, “Nationwide asked U.S. adults who currently receive or expect to receive Social Security what would happen if they missed half of a monthly payment. More than 60 percent said they could not survive financially.”   

Bradley also points out the sheer scope of Social Security’s impact. Roughly 74 million people are receiving benefits – more than 22 percent of the entre population. Despite the fact that Social Security was never meant to be the sole support for retirees, says the article, “It’s estimated that nearly 22 million U.S. retirees rely on the program’s benefits as their only source of income.” 

Uncertain SS Future Complicates Retirement Budgeting  

People are justifiably worried about Social Security’s future health. 

Bradley writes, “More than 80 percent of Americans are concerned about Social Security’s long-term outlook, Nationwide found. Planning for the future is difficult when you’re not sure what benefits, if any, will be available to you.” 

“There is definitely financial uncertainty across generations when it comes to Social Security,” Shannon Benton, the executive director of The Senior Citizens League, told Investopedia. 

Less Certainty Requires More Savings, Better Planning  

Bradley also spoke with certified financial planner Jason Fannon, who said “he is telling younger generations to plan for their retirements as if Social Security won’t be a reliable option.”  

Fannon told Bradley, “If I were a younger person, I would approach retirement as if it wasn’t going to be available to me. I don’t think that’ll be the case, I think we’ll have Social Security, but it might look a little different. I would suggest not relying on it being there [for planning purposes].”  

Fannon also told Investopedia that he’s advising clients in their 40s and 50s “to beef up their savings in case benefits are cut.”  He believes this age group “will be hit the hardest by reduced benefits” since many are 10 years away from filing Social Security claims.    

“People who are in their 50s can’t look at the Social Security calculator and say, ‘This is what I’m going to have for retirement, because they don’t know,” Benton said. “It could very well be cut quite a bit even by the time they retire.” 

A Financial Dashboard is a Key Tool to Combat Uncertainty 

In today’s climate of uncertainty, one tool that we’ve recommended repeatedly is what Rajiv Nagaich and Saket Sengar call a financial dashboard. 

“Whether it’s budgeting, investment advice, retirement planning or tax strategies,” Rajiv says, “you need a financial planner who is a a good fit for you, personality and professionally. Just make sure he or she understands the power of a financial dashboard.” 

The concept is fairly simple, Rajiv explains. “Your financial planner will help you create the dashboard. Then you’ll have the ability to take a long-term view of your finances while allowing you to look at a wide range of ‘what-if’ scenarios to account for unforeseen circumstances – things you can’t predict today. What will tomorrow’s inflation rate be? How much will Social Security pay you and your spouse? What if you retire early or get laid off? Your financial dashboard will boost your confidence because it lets you see how your plans will be affected down the line.” 

We urge you to contact us for more information on this essential planning tool.  

Rajiv Nagaich – Your Retirement Planning Coach and Guide 

The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. Retirement: Dream or Disaster joins Rajiv’s ground-breaking DVD series and workbook, Master Your Future, as a powerful planning tool in your retirement toolbox. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.  

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read. 

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more. 

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.  

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important message. And remember, Age On, everyone! 

(originally reported at https://investopedia.com)