Should You Factor Social Security into Your Retirement Planning?

As a millennial, I’ve always heard that Social Security income will be a thing of the past by the time we reach retirement age. The retirement age to qualify for full Social Security benefits has already increased from 65 to 67 years old, and it seems that’s a trend that is sure to be repeated. This moving target has some, including myself, on edge when it comes to planning for retirement. The ultimate question is whether you should factor these benefits into your future income or assume that the social security system as we know it will have disintegrated by the time we come to retirement age. Here are the basics to consider.

Change Is Sure to Come

I’d be hard pressed to argue that I think the Social Security system we maintain in the US today will be the same one we retire under in 30-40 years. That being said, I do believe that there will still be some form of government retirement saving available. What it will look like or what the retirement age will be by then is impossible to pinpoint, but I don’t think it’s time to panic quite yet. If anything, health care during retirement might be the biggest hurdle to overcome, but there is a lot of politicking yet to come, and we will definitely have to take a wait and see approach to this one. One option to consider going forward would be obtaining a life insurance policy that will allow you to use the benefits towards ongoing medical care during your lifetime. As an optimist, however, I still hold out hope that the government will land on a better solution before this becomes an issue for millennials.

Ensure Your Payments are Counted

In the meantime, there’s one very important step you can take to ensure that you are accruing Social Security benefits. Your future payouts are based off of how much you contributed to Social Security while you were working, so it’s very important to confirm that Social Security is recording the same amount as your employer reported on your W-2, and that no one is fraudulently taking payouts under your Social Security number. You can easily cross this off your to do list by visiting, providing the system with your personal information and establishing an account that you can check on regularly.

Once your account has been created, you should be able to see your wage amounts for each year you were employed, as well as what your estimated Social Security Income would be at certain retirement ages based off of your current income. While this is interesting information, it may not be extremely indicative of the actual course of events that may take place. The government retirement age may change, you may take a hiatus from work, or the payout formula could change, but what I want you to take away from this exercise is twofold. Confirm that your Social Security contributions are being recorded correctly and ensure that no one else is fraudulently taking payouts from your accrued benefits. Try to check back at least annually when you receive your W-2 to ensure that no funny business is happening without your knowledge.

It Never Hurts to Be Prepared

Though I’d feel comfortable giving you the advice to go ahead and factor a conservative estimate of your Social Security benefit amount into your retirement savings plan, it’s up to you and YOUR comfort level. Do you distrust the government with ferocity? Do you want to be able to retire early without having to factor in what the government’s ever-changing retirement age might be? If you lean towards this end of the spectrum, then maybe putting any reliance on Social Security benefits feels too risky for you. There’s nothing wrong with that.

The bottom line is that it never hurts to be prepared, and I’ve never heard of anyone complaining that they have too much saved for retirement. If you want to save and invest in a way where you feel you will be prepared in case anything does happen to your Social Security income, more power to you. It will raise the threshold of how much you need to save, but the peace of mind that comes along with that could be well worth the sacrifice.

Written By: Lindsay Dell Cook

Lindsay Dell Cook is a CPA, writer, and founder of Budget Babble. She lives in Philadelphia with her uber supportive husband, and enjoys taking their adorable mutt for walks or reading a good book while buried under a pile of cats.