Written by Taylor Financial Group, LLC
Some people are convinced that we are approaching the end of Social Security, and fast. In fact, it has been causing many Americans to question themselves:
“Will Social Security still exist when I retire?”
There are two main problems facing Social Security over the decades: American baby boomers both living longer and retiring more than ever before.1
By 2035, the number of Americans 65 and older will increase to more than 77 million from about 52.4 million today2. On top of that, “nearly nine out of ten individuals age 65 and older receive Social Security benefits” today.3 Overall, more people are expected to take out Social Security benefits in the future. In fact, some even estimate the Social Security trust fund to be exhausted by 2034 if lawmakers do nothing.4 Even though this is not a certainty, it is a possibility.
So why is this a problem?
Currently, 57% of retirees consider Social Security a major part of their annual income.5 If it went away, about 22 million more Americans would find themselves below the poverty line.6 Even if Social Security doesn’t disappear, it is highly anticipated that the benefits will be reduced or delayed in future years.
There’s no doubt that not knowing what the future holds makes planning for retirement difficult. But here’s what you should and shouldn’t be doing based upon this uncertainty:
- Start saving more for your retirement. Since it is up to the government to decide on how to address this shortfall, there is only one thing you can do: start saving for the future. Control what you can. If Social Security isn’t going to be around, that makes your preparation for retirement that much more important. If you need help creating a plan, talk to us!
- Call your local lawmakers or Congressmen to express your concern. Although this might not be the first thought that comes to your mind, the only way to intervene is to make the people in charge aware of your disapproval.
- Stay calm and wait to claim Social Security! Do not make a decision of when to claim Social Security based on the fear it won’t be around. While you are unique and should speak to us before making any decisions, if you expect to live to age 80, deferring Social Security until age 70 can be worth it.7 Every year you wait between your normal retirement age and 70, Social Security will add a guaranteed 8 percent to your eventual monthly payout8. Did you know that 42% of people collect Social Security at age 62?9 However, if you plan on claiming that early, there could be a reduction of as much as 30%!10 Talk to us so we can help ensure that you won’t be losing out on your Social Security benefits in retirement.
Have a question for Debbie about Social Security planning in Wyckoff, NJ?
Taylor Financial Group, LLC
795 Franklin Avenue
Bldg. C, Suite 202
Franklin Lakes, NJ 07417
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4 (gallup article)
8 (aarp article above)
10 (fool article above)