I’m a Financial Expert: Here Are 5 Things I Would Do With My Social Security
Written by
Laura Beck
Edited by
Rebekah Evans
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As retirement approaches, many people wonder how to best utilize their Social Security benefits. While you might be tempted to spend some of your hard-earned money on a fancy trip — there are a few things to consider first.
Certified financial planner (CFP) Anthony DeLuca from RetireGuide offers his expert insight on maximizing this hard-earned retirement income.
Understand What Social Security Really Is
Before diving into it, DeLuca said we need to shift how we think about Social Security.
“One fundamental piece most Americans do not understand about Social Security is that Social Security is not a given right. It’s an earned retirement benefit program,” DeLuca explained. “By definition, to earn full retirement benefits, it requires a worker to pay Social Security taxes for a minimum of 10 years.”
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This perspective shifts how retirees might view these payments. “Social Security checks are something that should be used and enjoyed,” he said. “It gets a bad rap because of concerns about sustainability and perceived inefficiency. But nonetheless, it’s still earned money. So, use it — and enjoy it.”
Cover Essential Expenses First
The financial expert’s first recommendation focuses on basic needs.
“I would first use your Social Security check to pay off all important expenses,” DeLuca said. This strategy offers additional benefits: “If you can avoid taking distributions from retirement accounts, do so. Allow this money to stay tax deferred and accumulate wealth at an exponential rate.”
Enjoy Life’s Pleasures
DeLuca offers advice that might surprise some coming from a financial professional.
“Next — and this sometimes seems like blasphemy coming from a financial advisor — but as aforementioned, I would enjoy the money. Spend it on hobbies and goals and dreams,” he explained. He adds that at this point in your life, you have full control over your schedule and you should enjoy it because, again, you earned it.
Consider Age-Friendly Home Improvements
Planning for the future by upgrading your living space makes both practical and financial sense.
“Other quick ideas you can do is home upgrades to help with your aging body,” DeLuca said. These improvements can enhance quality of life while potentially increasing home value.
Support Family or Charitable Causes
If your needs are met, DeLuca offered options for directing the funds elsewhere.
“If you are in no need of the money, you can always fund 529 education accounts for your grandchildren or an investment account for them as a beneficiary gift,” he shared. “Finally, if you are charitable, you can always donate.”
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