Why I View Social Security as Retirement Bonus Money — and Nothing More


Many seniors rely heavily on Social Security for retirement income. Certain seniors rely entirely on those benefits.

By contrast, I am not relying on those benefits to see me through retirement. That is not to say that I am not expecting any income from the program. There are rumors that Social Security is running out of money, but the reality is that the worst-case scenario at the moment is benefit reductions, not the program’s abolition.

Nonetheless, I’m taking a rather unique approach to Social Security. In a nutshell, I refuse to rely on those benefits to cover the costs of senior living. Rather than that, I view Social Security as a source of additional income. This is why.

Social Security (4)

Too many flaws and unknowns

Social Security is an admirable program. However, when it comes to sustaining seniors on their own, it falls woefully short.

To be fair, the program was not intended to be the sole source of income for retirees. Historically, workers were frequently compensated with pensions for years of service at the same company. This practice has largely ceased in the private sector in recent years. Now, it is up to employees to accumulate nest eggs to supplement their Social Security benefits.

In either case, if you’re an average earner, you should expect Social Security to replace about 40% of your pre-retirement earnings, and even less if you’re an above-average earner. Meanwhile, seniors typically require between 70% and 80% of their former earnings to maintain a lifestyle they are likely to enjoy. As a result, heavily relying on Social Security is a potentially dangerous strategy.

Then there are the benefit reductions to which I alluded previously. These are plausible scenarios that could occur in a little more than a decade if lawmakers do not intervene or find a solution to Social Security’s financial woes. Reduced benefits are likely to provide even less replacement income.

These are just a few of the reasons I refuse to rely entirely on Social Security for retirement. Additionally, I prefer to be proactive in planning for that milestone, which means working as hard as possible to earn money for my 401(k) plan.

I have control over saving money. I can take on additional work and make prudent spending decisions to free up funds for my retirement plan. Because I have no say in the future of Social Security, I cannot rely on those benefits excessively.

That is why I prefer to assume that any money I receive from Social Security is a bonus – not money I require for essentials. My plan is to create a retirement budget based on the amount of money I believe I can withdraw safely from my nest egg each year and the amount I believe I can earn through part-time work.


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If I receive a larger Social Security benefit than anticipated, that’s fantastic — that’s money I can spend on leisure. Perhaps I’ll donate some of it or give it to loved ones if I don’t need it.

However, I do not want to find myself in a position where I am forced to worry about benefit cuts or program changes that are out of my control. If I decide that I am not truly reliant on Social Security, this alleviates some of the pressure.

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