Will Social Security still be around when you retire? If not, what can you do about it?
on the long-term financial status of the Social Security Trust Funds. You may have seen the headlines.On the other hand, it seems the dire situation hasn’t changed.While the news is better for the disability side of Social Security, the retirement side remains under the same countdown clock to insolvency. In 2034, the same estimate as last year, the Old-Age and Survivors Insurance Trust Fund will become depleted.
In case you’re wondering, that’s an instant 23% pay cut for all those receiving Social Security checks in 2034 and forever after. Thus, we can see the end of the road the proverbial can has so often been kicked down.Pessimists say all is lost. If you’re not sure whether Social Security will be there when it’s your turn, what can you do right now to prepare for the worst once 2034 comes your way? The answer, of course, depends on your age. Everyone’s specific situation demands its own unique answer. That being said, reasonable guidelines can be offered for each generation. Here they are:Notice we’re skipping those born before 1946. In 2034 the surviving members of the Silent Generation will be no younger than 88 years old.
The next best strategy is to plan ahead. This means readjusting your Social Security claiming plan. “Baby Boomers should expect to see benefit cuts of 30%,” says Nathan Garcia, Director of Wealth Management at Strategic Wealth Partners in Fulton, Maryland. “They can delay their filing decision until age 70 so they have a normal retirement age benefit if a 30% cut occurs.”The original “latchkey kid” generation. Left home all alone to fend for themselves. They’re used to flying solo.
“Consider Social Security to be the bonus extra for your retirement income,” says Julie Murphy, author ofand owner of JMC Wealth in Chicago. “It’s now time to free yourself of all the debt you’ve created and put [the resulting savings] towards your own personal retirement planning before it’s too late. As you pay off a debt, just take that payment and shift it to your own wealth building for retirement.”Perhaps their mantra should be “Social Security for thee, but not for me.
More so than Gen-Xers, Millennials have time enough to carve out a significant slice of their own retirement pie. They’re in a position to never have to rely on the kindness of strangers. And if some stranger comes along passing out Social Security checks, well that’s just a dollop of ice cream on their slice of pie.“Millennials should be looking at Social Security as gravy in the meal we call retirement,” says Chrisanna T. Elser, Founder of ThefinU located in Denver.
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