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How to not come up short on your Social Security benefits

Learning how to not come up short on your Social Security benefits could be a key factor in attaining and maintaining your lifestyle in retirement. Even if you’ve paid into the Social Security program all of your working life, it is those who are in the workforce in the future that will be responsible for paying in while you receive benefits.

Unfortunately, there are far fewer workers today than there were just a few decades ago – and it is anticipated that there will be a much smaller number in the future. So, how can you make sure that you will still be able to count on retirement income benefits from Social Security?

Ratio of Social Security Covered Workers to Benefit Recipients

YearCovered Workers
(in thousands)
(in thousands)

Source: Social Security Administration / Fact Sheet Social Security 

How to “Insure” Your Social Security Retirement Income

Many people purchase disability insurance so that they can continue to receive income, even if they are unable to work. So, why not do the same thing to make sure that your retirement benefits from Social Security will continue if the trust fund runs dry?

How exactly does this work?

The coverage is actually a “rider” on an annuity, and as of late 2020, it is available in 44 U.S. states. Once the income guarantee period of the annuity is over, the annuitant (i.e., the income recipient) can either withdraw their premium or continue growing it for an additional five years.

Then, if the U.S. government mandates a qualifying reduction in Social Security retirement benefits, the annuitant will receive a “bonus” from the annuity, with the amount based on how long they have held the annuity. Then, the funds can be accessed penalty-free in order to cover any “gaps” in retirement income.

Is “Social Security Insurance” Right for You?

People who are in their 40’s and 50’s and planning for retirement are questioning what will happen if there is a reduction in their future Social Security retirement benefits. Adding to the concern regarding fewer workers paying into the Social Security program is the Coronavirus pandemic that was cause for further job cuts, and in turn, a smaller number of workers paying into the system. The Congressional Budget Office now estimates that the trust fund will be depleted by the year 2031. This fear is “too close to call” for many current and future benefit recipients.

While filling in a gap for lost Social Security income may allow you to sleep better at night, the truth is that this coverage may not be right for everyone. With that in mind, it is recommended that you discuss your specific situation, as well as your financial objectives, with an annuity specialist.

At Annuity Gator, our mission is to make sure that consumers and financial professionals fully understand how these products work before making a long-term commitment. So, if you have any questions about annuities and how they work, feel free to reach out to us by calling (888) 440-2468, or by sending us an email through our secure online contact form. We look forward to helping you keep your future income safe.

How to not come up short on your Social Security benefits

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