Most people, especially younger investors, are sceptical of whether or not social security will be around once they finally get to retirement. Social Security is on shakey ground, that’s for sure. But I don’t think you should assume that you’ll get absolutely nothing from it.
If you look at your most recent social security statement, on the front page, right hand column, there is a paragragh that reads: “In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for every dollar of scheduled benefits. We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations.”
However, changes could be made to the program that could put Social Security on firmer financial ground for at least 75 more years, according to a U.S. Senate Special Committee on Aging report released in May. Potential fixes currently being considered by Congress include tax increases, benefit cuts, and pushing back the retirement age. While none of these options are great, I guess they wouldn’t be the end of the world.
The bottom line is, you need to make sure that you’re not counting on Social Security as your ONLY source of retirement income. As you do your financial planning for retirement income, plan on getting a portion of what your Social Security statement says you’ll get. That way, if you get more, it will be a nice surprise. Saving more for retirement and setting up multiple sources of income will help secure a solid financial future for yourself and your family. My “Income For Life” post is a good one for more information on this topic.