A financial planner does the same 2-part calculation to figure out how much every client needs to retire

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Social Security is on shaky ground, and experts believe changes to the program are imminent.
At least one thing is for sure, according to financial planner Eric Roberge: We can safely assume Social Security benefits won’t be getting any bigger.
In an article for Kiplinger, Roberge said he runs two separate calculations for his clients who ask how much they need to retire — one that includes Social Security income and one that does not.
Roberge said anyone who wants to ensure financial stability in retirement should not rely on Social Security income.
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If you’re decades away from retirement, your strategy won’t look much like that of earlier generations who leaned heavily on Social Security to carry them through their golden years.

Recent reports show the Social Security trust — the government-run program that provides benefits to retirees, the disabled, and their families — will be underfunded as soon as next year, and experts believe changes to the program are imminent.

Social Security currently makes up about one-third of all the income received by retirees, according to research conducted by United Income and the Social Security Administration. The average pretax benefit for Social Security recipients is $1,420 a month, or about $17,000 annually.

Whether the changes to the Social Security program will include a reduction of individual benefits or an increase in taxes remains to be seen. For the sake of preparing for retirement that’s decades away, we should probably assume the payouts won’t be getting any bigger, wrote Eric Roberge, a certified financial planner, in an articlepublished by personal-finance magazine Kiplinger.

"This gives us an important starting point for planning purposes: No matter what Social Security looks like in the future, we know that it probably won’t be enough to cover all your living and healthcare expenses in retirement," wrote Roberge, who runs the financial-planning firm Beyond Your Hammock.

"When I create long-term financial plans for my 30- and 40-something clients that answer questions like ‘when can we retire?’ and ‘how much do we have to save to get there?’ we usually run at least two sets of projections," Roberge explained. "These baseline projections use all the same assumptions — except Social Security. With one projection, we assume the client will get 50% of their benefit. The other projection takes income from Social Security out of the picture entirely."

In some cases, Roberge said, clients will see their projected success rate — the probability that they will have enough money to last in retirement — plummet when Social Security is taken out of the equation. And it’s not even their "full" estimated benefit.

"This isn’t a reason to panic, but it is a great reminder to plan conservatively when you do your own projections or long-term savings strategy," Roberge wrote. "Your ability to fund the life you want today and tomorrow and ensure financial security for yourself should not depend on Social Security income."

For those closer to retirement, experts suggest waiting to claim Social Security to get the most out of it. Under the current program, delaying Social Security beyond your full retirement age increases your benefit by up to 8% per year.

New research from United Income found that elderly poverty could be cut in half if every retiree claimed Social Security at the "financially optimal time." The report said retirees stood to lose a collective $2.1 trillion in wealth, or about $68,000 per household, because they chose to claim Social Security benefits at the wrong time, which, for many, is before their full retirement age.

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