Can We Save Social Security From Bankruptcy?
I was speaking to a woman from work recently who had decided to begin drawing Social Security at age 65 while her and her husband were still working full time and bringing in plenty of money to continue to live at a high standard of living. I was wondering to myself why someone as healthy and as able-bodied as her would choose to draw Social Security before the age of 70, when clearly, those who wait until age 70 to draw from Social Security, would get a significant more per month in their Social Security check. One day in a discussion about retirement, my co-worker mentioned to me that she figured she better take her Social Security money now, while the going is still good. Her concern is that with all the financial troubles facing Social Security these days, it’s only a matter of time before her benefits are cut. While it’s true that Social Security is facing insolvency problems, it seems unfathomable to picture a retirement system in the U.S. without the steady presence of Social Security to help our nation’s elders fund retirement. So the question is, Is Social Security really as bad off financially as everyone seems to believe?
The truth is, back when Social Security was first created in 1935, it was based on 1935 mortality rates and on the assumption that there would be more workers alive to pay into Social Security than there would be retirees trying to take money out of Social Security. Since 1935, things have changed. We now are living to ages that would have stunned our relatives from 1935, and the Baby Boomer generation greatly outnumber the younger working generation behind them. Thus, with the more baby boomers that plan to draw Social Security, we have fewer people working to cover those who are in retirement. At its current rate of expenditure, Social Security will be totally bankrupt by 2037. It already is not making enough in revenue to cover the current demand.
Can I Plan On Social Security For Retirement?
Frankly, the 3-legged retirement stool that Americans have come to rely up on for retirement is now a broken stool. With Social Security having such deep financial trouble, and with employer based pension-plans disappearing from the retirement seen, more and more Americans are going to become reliant upon their own ability to save and prepare for retirement. In all likelihood, Social Security will exist in some format. Those who are in poverty, who cannot support themselves without the aid of government assistance, will still have access. Those of us, who have the ability to plan and prepare for retirement, need to do so.
For more information on how to begin preparing for retirement to ensure your future happiness and financial security, speak to a Redhawk Financial Advisor near you.