Worried About Future Social Security Cuts? 5 Changes To Make To Your Retirement Plan Now

Americans are increasingly concerned about Social Security. The program will likely have to cut benefits around 2033 unless the federal government shores up funding for the program, which would affect more than 70 million people who receive Social Security benefits each month. Recent cuts to funding levels at the Social Security Administration and Tesla CEO Elon Musk’s recent unsubstantiated claims of fraud are dragging down the public’s confidence that the government will safeguard the program’s payouts. 

Americans who think Social Security will eventually be cut may want to take action in their own finances to secure their retirement plan. Here are five things you can do to improve your retirement plan, replace potentially missing Social Security income, and safeguard your future.

1. Commit to maxing out your 401(k) — and max the catch-up

A 401(k) plan is one of the best tools that everyday Americans have for saving for retirement, since it lets you sock away so much each year via an easy-to-use paycheck deduction. Plus, many employers sweeten the deal by matching your contributions, turbocharging your savings.

In 2025, all workers can contribute up to $23,500, while those age 50 and older can put in an additional $7,500 as a catch-up contribution. Those who are ages 60–63 can add even more, topping up their account with a super catch-up contribution of $11,250 in lieu of the regular one. 

Your 401(k) plan offers you a great way to save on a tax-advantaged basis, letting you contribute to a traditional plan on a pre-tax basis or an after-tax basis via a Roth 401(k). They’re some of the best ways to grow your private assets and offset a potential Social Security shortfall. 

2. Revise your asset allocation

Your retirement plan’s asset allocation is what financial advisors are referring to when discussing what portion of your investments are in stocks versus bonds, which are the two major asset classes. Your asset allocation is important because it determines how much your portfolio will grow over time. Portfolios with a heavy weighting toward stocks tend to deliver higher returns than those with a heavy weighting toward bonds, though stocks are more volatile in the short term.

Allocating more of your assets to stocks can help you grow your 401(k) more over time than sticking with a bond-heavy portfolio. If you have a long time until you need to access your funds, you can afford to be more aggressive — that is, have more in stocks — than if you have a shorter time frame. By revising your asset allocation, you can make more money over time without contributing more to the account — but you don’t want to get too aggressive with your 401(k). 

3. Stock up on dividend payers

Dividend-paying stocks are one of the best picks for those looking for true passive income, and the best dividend stocks make a sizable payout quarterly and then grow that over time. Dividend stocks are a boon for retirees, offering regular, sustainable income to use in your golden years.  

If you don’t want to do the heavy lifting of buying individual dividend stocks, it’s easy to buy dividend stock funds, which are available in many 401(k) plans and most of the best IRA accounts. The best dividend funds allow you to own dozens or even hundreds of companies, reducing your risk through diversification, and they pay a solid dividend that should grow over time. 

Dividend stocks are a great way to offset any income that could be lost to Social Security cuts. 

4. Consider annuities

An annuity is another way to generate a stream of income in retirement, and some even allow you to set up lifetime income for you and a spouse, offering a solution to a Social Security funding shortfall. Annuities offer a ton of different features, such as lifetime income (though that can increase the cost of these contracts), and they may make sense in your financial situation. 

The downside of annuities is that they’re costly, complex and illiquid. Annuities have built-in fees that can eat up a huge chunk of your potential returns, and complex annuity contracts are tough to understand, so it may not always be clear what your rights are. Finally, it’s difficult to cancel an annuity without paying a hefty fee, meaning accessing your money may be tough to do.

Still, an annuity can help the right person to generate steady income, but working with a fee-only financial advisor can help you determine whether it makes sense in your situation. 

5. Work with a financial advisor

A financial advisor can help you make the smartest financial decisions and avoid some of the mistakes that trip up others. A great advisor can help you navigate the best time to take Social Security based on your needs, make smart investment decisions and avoid bad decisions. 

You’ll want to work with an advisor who’s incentivized to make decisions in your best interest, and that means working with a fee-only fiduciary advisor. You pay the advisor from your own pocket, but that helps ensure that you’re always getting the best financial advice. As the old saying goes, he who pays the piper calls the tune.

Bottom line

Savers with a long time until they need to access their retirement funds need to make relatively small changes to their retirement accounts to counter the effects of a potential cut to Social Security, while those with less time need to be more aggressive. However, neither group should delay in making changes, since time is your biggest ally in building wealth and a secure future. 

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.