Mark Cuban’s Advice for Retirees Counting on Social Security To Cover the Bills

When you set up your initial retirement plan, it was probably based on some predictability. The problem is that retirement often comes with unpredictable bills, the type that a monthly Social Security benefit may not be able to cover, even with cost-of-living adjustments.

Mark Cuban, whose advice doesn't typically target seniors, does know a lot about avoiding costly money mistakes. So, can his wisdom apply to the retirement conundrum? We share what he's said about earning and investing and how it may apply to seniors living on Social Security alone.

Social Security may cover less of your old paycheck than you expect

If you rely on benefits to reproduce a working household's income, you'll probably experience a gap. The Social Security Administration estimates that benefits replace about 42% of earnings for medium earners who start collecting at age 67.

The estimated average monthly benefit for retired workers in January 2027 is $2,170, likely far short of many workers' former full-time income. It replaces a percentage of income, not expenses, which can climb even as you age. That's why protecting your income, with some of Mark Cuban's advice, may help you make the most of what you have to live on.

Pay down expensive debt first

Cuban said in an interview on The Ramsey Show that if you pay down credit card debt with 15% or 20% interest, you'll essentially earn 15% or 20% by avoiding those interest charges. He stresses that this is a known financial benefit, unlike uncertain market returns.

For retirees, interest charges compete with groceries, housing, and medical bills on an already limited monthly income. By targeting the highest-APR balances and putting that interest payment back into the household budget, you can see your Social Security payment go further.

Build a cash cushion before investing more

Cuban has argued for an emergency fund of at least six months' income, although it was originally in the context of preparing for job loss or other disruptions. That doesn't mean seniors can't also benefit.

With this rainy day fund to absorb the cost of an emergency house or car repair, retirees may be able to avoid selling assets or downsizing their home to avoid disaster. And if they're living on Social Security with few assets available, this is even more of an important rule.

Keep investments simple and inexpensive

Cuban has shared his approval of low-cost S&P 500 funds in a few interviews. This strategy spreads the risk across several companies and industries, while the low fees leave more of the original investment available for the investor.

Of course, investing happens after basic needs are met, including health care costs and housing. But if there's room in the budget and an emergency fund is in place, choosing an investment you understand is important. If you can't tell someone how the investment makes money and how much you pay in fees, you may need more information before investing. Even a low-cost stock fund can lose value.

Give healthcare its own budgetary bucket

Cuban has said that healthcare may be unaffordable even with insurance to help. He has even spent significant time and resources working on the healthcare cost problem. For retirees, this is especially important, as Social Security alone may not be enough to match rising prescription, treatment, or long-term nursing costs.

As such, it's best to count healthcare as a separate expense with ample leeway for growth as you age. If you're unsure how much to budget, look at insurance coverage documents and recent bills for perspective. And be aware of how annual plan changes affect the care and meds you regularly use; what was covered last year may not be the next.

Waiting to claim can sometimes help

This isn't a recommendation from Cuban, but a matter of how Social Security calculates retirement benefits. Waiting to claim can increase your monthly payment, though whether it pays off overall depends on your circumstances.

Delayed retirement credits apply after FRA and stop at 70. So, if you can depend on a spouse's income or part-time work to get by, you can get larger benefit payments when you do have to rely on them. Of course, waiting requires being able to cover your bills without those payments. If you're already collecting, you may still be able to increase future payments by voluntarily suspending benefits after reaching FRA and before age 70.

Bottom line

Cuban has some valid advice for living within your means, paying down debt, and investing only in things you know about. These strategies can be useful for many people, including those trying to stretch a Social Security payment.

And if you're married, divorced, or widowed, ask SSA whether you qualify for spousal or survivor benefits, including senior benefits based on a former spouse's work record. You generally won't receive two full benefits added together, but you may qualify for a higher total monthly payment than you would receive on your own work record alone.

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