What’s happening with Social Security?
Social Security is on the cusp of several new changes which will come into effect in October 2025. As inflation ticks down, Social Security payments could decrease too, due to a lessened cost-of-living adjustment (COLA). While falling inflation is good news in theory, it hasn’t yet shown up in practice. The price of groceries and energy remains high, so smaller Social Security payments are worrisome for those trying to pay bills and make ends meet.
The full retirement age (FRA) is also set to increase, gradually rising up to 67 for those born between 1955 and 1960. By 2025, retirees will also need to meet stricter income qualifications to earn Social Security credits.
If these changes indeed take place, Social Security benefits may get even further from being able to provide a comfortable retirement. That’s why it’s critical to find multiple ways of reducing your dependency on Social Security, regardless of what policy any future U.S. president puts into place.
A key way to start locking in your retirement funds is to save in high-interest accounts. A high yield savings account promises to put your money to work, and earn you a greater return than just keeping your cash in any old account.
A CNBC survey found 82% of Americans don’t use high-yield accounts, holding only traditional ones instead, growing their wealth at just 0.46% interest. Thankfully you have options that can help you grow your nest egg faster
You can compare your options by checking the Moneywise list of the best high-yield savings accounts of 2024, offering a quick, one stop look at the best accounts to grow your savings over time. It’s the first step to giving yourself a leg up on having a bigger buffer for retirement, no matter what your Social Security payments are.
More ways to be less reliant on Social Security
While high-interest savings accounts are important, the most robust retirement strategies incorporate multiple investments across different asset groups. For instance, inflation-resistant assets like gold can play a crucial role in protecting you against rising prices — especially if the COLA won’t.
Contribute to retirement accounts early and consistently
Personal finance author and expert Suze Orman as long-touted the importance of opening and contributing to retirement accounts.
She couldn’t have been clearer in her podcast, when she proclaimed “the best way to prepare for retirement is to only have Roth retirement accounts – bar none.”
Although it will be subject to income tax, and will contribute to your taxable income upon retirement, a gold IRA can be a terrific risk-adjusted complement to a Roth IRA, which could be riskier depending on assets you hold inside.
Instead of being made up of stocks and bonds, a gold IRA allows you to directly invest in precious metals and merges the tax advantages of a traditional retirement account with gold’s capacity to hedge against inflation and market volatility.
American Hartford Gold is a leading dealer of precious metals, and offers IRAs and direct purchases of precious metals and coins.
Sign up now for your free 2024 information guide to find out if a gold IRA is the right move for your retirement goals.
Another way to ensure you’re on the right track for retirement is to find a qualified advisor — and you can so find one for free with Advisor.com.
It’s a user-friendly platform that connects you with qualified financial advisors who can tailor a retirement plan to meet your needs. With just a few clicks, you can find your financial advisor, book your free consultation, and start mapping out the right strategy that works for you.
Professional advice can be a surefire way to feel like you’re following the right strategy to maximize your money, while minimizing tax liabilities — no matter who gets elected next month and what happens to Social Security.
Bolster your retirement portfolio with real estate
There are tons of other ways you can reduce your reliance on Social Security in retirement overall, including developing a healthier and more robust retirement portfolio.
Many Americans look to real estate to bolster their portfolios. Throughout most of our history, housing prices have grown at a slightly-higher rate than US inflation.
During the ‘Great Moderation’ of 1990-2006, where markets were relatively stable, housing returns were even greater than stock market returns.
While the growing price of real estate can be a good thing if you already own real estate, it’s made things increasingly hard for those looking to buy homes as an investment or to retire in.
Fortunately, you can still get the benefits of the hot housing market with companies like Cityfunds.
Cityfunds is a firm that allows you to own a share of owner-occupied residential properties in booming U.S. cities – including Los Angeles, Miami, Nashville, Denver and Dallas.
Here’s how it works: Cityfunds secures an interest in the home's future value, and as the home value appreciates, so does the value of the Cityfunds investment alongside the homeowner.
You can effortlessly gain access to the $20 trillion home equity market that spans multiple top U.S. cities and start investing for as little as $500.
And you aren’t limited to residential investments. Commercial real estate — which can often involve long-term leases with reliable tenants — is another example of a potential steady income stream.
For the accredited investor with a little more liquid capital, First National Realty Partners (FNRP) allows you to access institutional-quality grocery-anchored commercial real estate investments — without the leg work of finding deals yourself.
FNRP has developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods. You can engage with experts, explore available deals and easily make an allocation, all in one personalized portal.
You can even invest through a self-directed Roth IRA — meaning, you’ll receive tax-free payments and distributions that won’t be added to your combined income calculation come tax time.
