The Social Security Trustees project that the program’s combined trust funds will be depleted in 2035. That’s right, about ten years from now. The Trustees are projecting that once Social Security’s trust funds are depleted, the program will be in a position to pay only 83% of scheduled Social Security benefits.

It’s important to prepare now for potential benefit cuts.

This isn’t the first time in its history that Social Security has faced the potential for benefit cuts. In the past, lawmakers have managed to find ways to avoid them, and they may very well end up with a solution this time around, too. But still, given the latest update from the program’s Trustees, it’s probably a good idea to prepare for Social Security cuts in case lawmakers are unable to bail the program out this time around.

As coastal Floridians, we are very aware of the low pressure systems that come off the coast of Africa. The wise start preparing early for the potential for bad weather that could result. That early preparation has proved to be a huge determination in how successful we are in weathering the storm. We should view the potential Social Security benefit cuts the same way.

What can we do?

Younger workers can take steps to build more savings so they have more cash reserves to tap into during retirement. Utilizing employer retirement plans, like IRAs and Roth IRAs are easy ways to save on a regular basis. Because time is on their side, this can be done without having to part with huge sums of money on a monthly basis. Near-retirees, meanwhile, may need to push off retirement and take advantage of catch-up contributions in their retirement accounts. They can also look to ease into retirement rather than suddenly stop working, to avoid tapping into their existing savings for a longer period of time.

Current retirees may have fewer options for compensating for Social Security cuts. But now’s a good time to assess and reduce spending, to bank some savings and even considering the gig economy, working a few hours a week on a flexible basis.

The Social Security trustees have identified the low pressure system coming off the coast of Africa. Don’t wait until you are smack-dab in the middle of the cone to secure your financial house. Start preparing now.

Thanks, Dave