Social Security Cuts: 5 Creative Ways To Prepare Now If You’re Worried About the Future

caucasian woman in white shirt standing in front of wooden fencing with "room for rent" ads and calling to house owner.
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Social Security is one of the most important government programs in the United States. According to the Social Security Administration, more than half of households with someone age 65 and older rely on Social Security for 50% or more of their income, and 25% rely on Social Security for at least 90% of income.

Yet, even with a relatively modest average benefit of $1,791 as of July 2023, there may be cuts on the horizon. The latest report from the Social Security Trustees indicates that the trust fund will be insolvent by 2033, at which point incoming revenue will be sufficient to pay just 77% of expected benefits.

While Congress still has time to enact changes to shore up the program, if you’re a retiree — or almost there — you might want to take some steps to prepare for potential cuts. Here are some suggestions.

Downsize Your Home

By the time you retire, the home in which you’re living might be too big for you. If you raised a family and are now an empty-nester, there’s really no need for you to have all of that real estate, especially if you’re worried about cuts to Social Security.

Downsizing to a one- or two-bedroom home from a three- or four-bedroom one can likely put a lot of equity into your pocket, which can directly boost your income in retirement. You’ll also end up saving on utility and maintenance costs, which can quickly add up in a big home. 

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Rent Out Your Extra Rooms

If you have a special attachment to your home and don’t want to let it go, that’s understandable. Many retirees don’t want to give up the memories in their lifelong homes, especially if they raised families there.

In that case, there’s still a way you can combat potential future cuts in Social Security, by renting out some of your extra rooms. While perhaps not ideal, it’s a way you can maintain control of your home and still generate significant extra monthly income. If you were to rent out two of your extra rooms for $900 each, for example, you’d be earning as much as the average Social Security check right there. 

Get a Roommate

A final option if you don’t want to leave your residence, whether you own it or simply rent it, is to get a roommate. If you can save a few hundred or even a few thousand dollars per month in rent, you could more than make up for any potential cuts in Social Security. Although an anonymous roommate may not be your ideal option, see whether you can share your home with someone you know. Either way, it’s an easy strategy to help boost your income at a time when you may need it most.

Start a Side Gig

Most retirees don’t want to give up their free time and work another job. But, if you’re in need of an income boost, there are a number of side gigs you could pick up that won’t require much of a time commitment but could provide the extra money you need.

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For example, if you’re earning the average Social Security benefit of $1,791 and are just looking to counteract a potential 23% cut in your benefits, you’ll need to earn only about $412 per month to break even. With a $20 per hour side gig, that amounts to just over 20 hours of side work per month, or about five hours per week.

If you can turn your hobby into a side gig such as woodworking, crafting or even basic home maintenance, you might actually enjoy it and could earn even more. 

Rent Out Your Car

One of the newer areas of the gig economy involves renting out your car to strangers. While this may not seem appealing on the surface, there are actually some companies who handle all of the heavy lifting for you, including providing insurance. While you may have to live with some additional wear and tear on your car, if you’re not really using it much anyway, it can be a great way to generate some good revenue without having to lift a finger. 

If You Haven’t Yet Retired

If you haven’t yet retired, you’ve got a little more flexibility when it comes to your Social Security situation. First, do all you can to max out your earnings, as that will boost your future payouts. The SSA takes your 35 highest years of earnings into consideration, so if you can bump some of your lower-earning years out of the equation, you’ll fare better in the long run.

Also, if you’re worried about cuts, see whether you can work a little longer or delay claiming your Social Security benefits. Every year that you can delay filing for benefits from age 67 to age 70 (assuming you were born in 1960 or later) can add 8% to your monthly check. This means that waiting until age 70 could boost your payout by 24%, just enough to offset the potential 23% cut that may arrive in 2033. 

Are You Retirement Ready?

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