Posted on 01/10/2018 8:07:57 AM PST by Oldpuppymax
If you’re counting on Social Security to finance your retirement, you’re in for a big surprise—and not the good kind.
Let me give you two reasons why.
One: Social Security is going broke.
And, two: Even if it weren’t going broke, it couldn’t possibly cover the cost of a decent retirement.
Let’s look at these two reasons in a little more detail, and then I’ll propose a solution.
Social Security is going broke.
When this government program was set up in 1935, the average life expectancy was 60. But you couldn’t collect your first check until you reached 65. In other words, most people didn’t live long enough to receive Social Security. And most of those who did, didn’t collect it for very long. Today, the average lifespan is 79. So now, most people do live long enough to receive Social Security—for 10, or 20, or even 30 years.
Here’s another important piece of information: When the program started, the ratio between worker and retiree was 159 to 1. That means for every one person drawing benefits, 159 were paying in. Today the ratio is 2.8 to 1. Get that? We’ve gone from 159 workers supporting every retired person to fewer than three workers supporting every retiree. And it’s going down.
You don’t need an advanced math degree to figure this one out: Social Security is spending more than it’s bringing in. Far more. Its own Board of Trustees has said that it will be bankrupt within twenty years.
That doesn’t mean it won’t exist. It means that either the government will pay you less than it promised, or it will have to raise taxes to make up the shortfall. Most likely, both.
Sounds about right for an entitlement program...
(Excerpt) Read more at thecoachsteam.com ...
Wow, that's pretty incredible giving an 8% average annual return is what is assumed.
All three of my teenaged kids work part-time jobs. Two have access to 401k plans which are rockin' the house. If they keep this up over their 30-40 working lives they should be set. If only I had started a 401k when I was in my teens (sigh).
It’s not even advanced math. Anyone with Grade 5 math can figure out it is a pyramid scheme.
Anyone whom ever believed it was enough for retirement needs a shake.
If you want to see SSI bolstered up, simple.
Scrap all federal employee pension, place the entire amount into SSI, and then the federal government would definitely make sure it remained viable.
After that, I did not want to risk my capital any longer and wanted to pretty much preserve what I had left. I should have pulled my money from the market in 2008 and put it in safe harbor somewhere. Coulda, woulda, shoulda, but didn't.
I don't worry about missing the run up on the stock market recently. Because there will be sell offs too where you will lose money. Better to not be too greedy when you don't have any income earning capacity left to replace the lost monies.
I saved my money after 2008 but didn't invest it. When I retired, I built a new house with the cash, paid off mortgages on two rentals and cleared the deck of any credit cards or misc. debt.
Now I have cash in the bank, no debt and a steady income. Am I wealthy? No, but it's calving season and life is good. :-)
Samadams,
How much did that 69 year old make right before he retired?
I think it will be there, but they will means-test the bejeesus out of it, so those able and willing to save all these decades will be punished.
Around $60k
But what will happen to the money the federal employees put into their pensions? There is no easy answer.
You mean OUR money that WE pay them.
Just like SSI they can take our money without any recourse.
We’re not taking it, we’re putting it into SSI
Regarding that guy in your post #63
http://www.freerepublic.com/focus/bloggers/3621169/posts?page=63#63
IMHO he got taxed big time* (up to 85%***) on his soc sec because he made 60k/year.... he may have gotten his salary plus soc sec (maybe 2366x12** =28392 + 60k total 88392) gross pay, but paid a lot of taxes that ate up the soc sec and some of the salary....
That’s the kicker.
*See Obadiah’s post
http://www.freerepublic.com/focus/bloggers/3621169/posts?page=78#78
** See minnesota_bound’s post
http://www.freerepublic.com/focus/bloggers/3621169/posts?page=12#12
*** and patriotspride’s post
http://www.freerepublic.com/focus/bloggers/3621169/posts?page=34#34
If people are working they are paying into Social Security. Only the gov’t thinks it is a good idea to penalize that person.
They never seem to run out of money for welfare...
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