If you’ve seen coverage of the Social Security Board of Trustees’ 2021 Annual Report to Congress, it may be natural to ask the question, “Will Social Security be around when I retire?” That’s because the report found that the Old-Age and Survivors Insurance (OASI) Trust Fund is currently projected to be underwater by 2034 — one year earlier than was predicted last year.

It can be easy to hear the news and think that Social Security won’t be around when you retire, but the news may not be as bad as you think.


Today’s Social Security benefits are paid primarily through annual taxes. But the benefits the program currently pays exceed the tax revenue allocated for Social Security. Because of that, the program has been drawing down its trust fund. When the trust fund is depleted, tax revenue will allow Social Security to continue paying out 76 percent of benefits even after 2034.

And that’s if Congress does nothing to fix the problem. There are a number of potential solutions, including increasing taxes (on everyone or high-income workers) that fund the program, changing eligibility for benefits (e.g. raising the full retirement age or means testing) or a mix of both.

So, while many news stories are sounding the alarm, it’s probably premature to panic about whether Social Security will be around when you retire just yet. The Trustees report is designed to give Congress ample warning about potential fiscal imbalances so that lawmakers have time to address problems well ahead of any actual shortfalls. The report also noted that the pandemic has had an impact on the trust fund, something that could reverse when the pandemic abates and unemployment goes down.

While Social Security tends to be the cornerstone of most people’s retirement plans, it should be considered as one part of your overall plan to create income in retirement.

Here are some other things to consider incorporating into your retirement plan.

Guaranteed Income

Guaranteed income is an important part of many people’s retirement planning. This is money that you’re certain to get every month or year no matter how long you live or how the market is performing. Traditional sources of guaranteed income include Social Security and pensions, but you might also incorporate annuities into your retirement plan. Annuities are a good way to create regular income that you can’t outlive.

Traditional 401(k)s and IRAs

Tax-deferred retirement accounts like traditional 401(k)s or IRAs give you a tax break for your contributions and also allow those contributions to grow on a tax-deferred basis. These types of accounts are critical for helping you build a nest egg that you will eventually use to help generate your retirement income.

Typically, these accounts will include investments that will help you continue to grow your funds in retirement but are also subject to market volatility. In addition, you’re required to pay income taxes on the funds you take out as retirement income, and when you reach a certain age you’ll be forced to take required minimum distributions.

Roth Accounts

Roth accounts are post-tax savings vehicles, which means that you’ve already paid taxes on the contributions you put into the account. But the funds grow tax-free and typically aren’t taxed when you take them out as distributions in retirement, which also makes them qualified accounts. Roth accounts can help you grow your net worth in preparation for retirement, but as with traditional 401(k)s and IRAs, the amount you have at retirement depends on the performance of your investments. However, the fact that you don’t have to pay taxes on distributions helps you better manage tax-related risks in retirement.

Whole Life Insurance

Whole life insurance can play an important role in a retirement plan. In addition to its lifetime death benefit, whole life insurance also builds cash value, which isn’t affected by the markets. Many people use whole life insurance cash value to supplement retirement income, drawing on it during market downturns or for additional tax-efficiency (you can generally withdraw the basis that you paid into the policy tax-free). In addition, the death benefit can serve as a way to be deliberate about your legacy.

Traditional Investments

In addition to savings you may accumulate in tax-advantaged retirement accounts, many people also save in traditional investments (which don’t get special tax advantages).

Working With an Advisor

While the future of Social Security may be in question, it’s likely that you will still get a significant portion of your benefits. A financial advisor can work with you to show you how Social Security will work with other parts of your financial plan to help you generate the income you need in retirement.

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