Money Expert Bernadette Joy: Why You Should Not Rely on Social Security for Retirement

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Planning for retirement has many aspects and moving parts, one of which requires you to evaluate multiple income sources. Though Social Security benefits can come in handy during retirement, money expert Bernadette Joy suggests adding other income sources to round out your financial plans in case it won’t be enough to meet your needs.

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According to this money guru, here’s a quick rundown on preparing and saving for retirement in case you need more income than your Social Security benefits will provide.

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Social Security Benefits May Not Be Enough

Bernadette Joy notes that her parents attempted to depend solely on these benefits, but it wasn’t enough when her father passed away and her mom became ill. Plus, the Social Security Administration estimates that the trust fund reserves will be depleted by 2037. Though there’s a chance that taxes could continue to cover some of the fund’s obligations beyond this date, there’s no guarantee what will ultimately happen.

In other words, you need a backup plan to fund your retirement if Social Security benefits aren’t enough.

Anticipate Your Payout Now

Bernadette Joy suggests you take steps to understand what Social Security could pay out when you’re ready to retire. You can get estimates by using the Social Security Administration’s online quick calculator or logging into your Social Security account to obtain an estimate of your future retirement benefits. Also, you can see the effects of different retirement age scenarios. If you don’t have a personal my Social Security account, create one here.

Anticipate Your Retirement Budget

Now, it’s time to check your anticipated Social Security benefits income against your retirement budget. To plan your monthly budget for retirement, first, think about your daily expenses, like food, housing and transportation. Make a list of all the things you spend money on each month. Next, remember to include costs for health care, entertainment and any hobbies you enjoy.

Compare your total estimated expenses to the money you’ll get from Social Security and other savings. This will help you determine whether you need more income or to adjust your spending plans.

Plan for Other Income Sources

If you’ve discovered that you’ll need more monthly income than what Social Security will provide, Bernadette Joy says it’s time to get to work. She suggests ramping up your savings sooner rather than later. Here are some ways to get started:

• Take advantage of employer-sponsored retirement plans like a 401(k), 403(b) or Thrift Savings Plan;

• Open and contribute to an individual retirement account (IRA);

• Explore additional savings products like high-yield savings accounts, CDs or money market accounts.

Even if it feels like you don’t have much to save, her advice is to prepare for accelerating your savings rate by:

• Paying down high-interest debt to free up cash flow;

• Opening savings and retirement accounts now so they’re available when you’re ready;

• Creating watch lists to track investments you are interested in;

• Consuming content and interacting with people who inspire the financial responsibility in you.

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This article originally appeared on GOBankingRates.com: Money Expert Bernadette Joy: Why You Should Not Rely on Social Security for Retirement