If you think Social Security will be enough to live on in retirement, have a Plan B.
According to Shark Tank investor Kevin O’Leary, Social Security was never designed to be a sole source of income. In fact, with average monthly benefits rising to about $2,076 in 2026, it’s truly not sufficient to live on. Plus, we have to consider that the Social Security lifeline may be a lot shorter than you think. In fact, you may want to have a Plan B for that, too.
Social Security May Run Out Sooner Than Expected
According to CBS News, Social Security’s trust fund could run out a year earlier than expected, according to a new projection from the Congressional Budget Office (CBO).
“The CBO forecasts that the Old-Age and Survivors Insurance Trust Fund — one of the two funds Social Security taps to disburse benefits — will be exhausted in 2032. Current projections from the SSA Chief Actuary suggest this could lead to a 23% across-the-board benefit reduction if the trust fund is depleted,” reports CBS News.
Part of the reason for the issue is the forecast of higher inflation. Recent estimates for the 2027 Cost-of-Living Adjustment (COLA) have climbed to 4.0% due to spikes in energy and housing costs. This is in addition to reduced individual income taxes and payroll taxes. So, you may want to have a Plan B, which means you want to build wealth on your own while lowering what you expect the government to do.
So, what does Mr. Wonderful suggest?
First, take some personal responsibility and leverage new laws.
Don’t depend on the government to help out. Build your own retirement through saving with 401(k)s and other investments. Under the SECURE 2.0 Act, workers aged 60 to 63 can now take advantage of a “Super Catch-Up” contribution limit of $11,250, allowing for a total annual contribution of $35,750.
Remember to max out your contributions to retirement accounts if you can. Accounts with tax advantages – 401(k)s, IRAs, health savings accounts, etc. – are great ways to save. Note that as of 2026, if you earn over $150,000, the IRS mandates that catch-up contributions be made on a Roth (after-tax) basis. Also, if your employer offers a match program, contribute enough to receive the highest employer match possible. Let’s say your employer will match up to 6% of your salary; maximize that.
Two, if you have limited savings, cut your expenses and cut out luxuries.
“Radically cut down on all your expenses. Lose the car. Lose the cable. Maybe even lose the cat. You’re in an emergency,” O’Leary said, as quoted by The Street. “You have to look at every expenditure with a critical eye and make tough decisions about cash flow. Five to seven years before retirement is the time to practice living frugally. Get used to deprivation before you’re deprived.”
“If you waste money on coffee, it’s like ‘peeing $1 million down the drain,’” once said finance coach Suze Orman.
Right now, the average cup of coffee can cost about $7. If you get coffee once or twice a week, it’s not too bad. But if you’re doing it every day – which many of us do- it’s costing you $210 a month, and $2,520 a year.
Instead, according to Suze Orman, “$100 a month in a Roth IRA, over 40 years, is $1 million. So, you need to think about it as you are peeing $1 million down the drain after you are drinking that coffee. If you just simply used your money to purchase needs versus wants, you would find the money to invest in your retirement account.”
Three, address healthcare costs.
Kevin O’Leary also says folks should plan for higher healthcare costs.
In fact, as noted by SharkTankBlog.com, “Health care alone can take a serious bite. A recent estimate from Fidelity Investments puts the expected medical costs for a 65-year-old-retiree at well over $170,000 across retirement. And that’s before factoring in everyday living. Add rising prices for basics like food, utilities, and services, and the math shifts quickly. The takeaway is simple. Planning for retirement means planning for higher costs than you expect.”
The reality is this: Social Security was never meant to carry you across the finish line alone. With rising inflation, potential 23% benefit cuts, and growing healthcare costs, relying solely on government benefits is no longer realistic.
But you do have control of what happens next with your money. Every dollar you save, every unnecessary expense you cut, and every smart contribution you make—including the new “Super Catch-Up” options—moves you closer to financial independence. Plan B just makes sense at this point. Remember to take responsibility, cut ridiculous expenses, and make sure you’re prepared for the actual costs of the future.
Editor’s Note: This article has been updated for May 2026 to include the latest national average benefit of $2,076, new 2027 COLA projections of 4.0%, and specific retirement contribution changes mandated by the SECURE 2.0 Act, including Roth requirements for high earners and the “Super Catch-Up” provision for those aged 60-63.
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