Retirees need more than Uncle Sam’s help in order to survive…
In 2021, the Social Security Administration (“SSA”) paid out over $1 trillion to recipients. And that number is about to grow even bigger…
You see, SSA issues a cost-of-living adjustment (“COLA”) each year. It’s 5.9% in 2022 – the biggest annual increase in about 40 years. It will boost SSA’s total payout by almost $80 billion.
That’s great news for folks on Social Security. But it will further deplete the dwindling trust accounts that fund the program.
Even worse, the COLA doesn’t cover actual cost-of-living increases. The Consumer Price Index (“CPI”) – a gauge for the costs of goods and services – is up 7% year over year.
Folks, Uncle Sam’s retirement plan for Americans is hurting. So it’s more important than ever for you to take matters into your own hands…
Now, I’m not against the Social Security benefit itself. I’m just worried about its sustainability, especially after such a massive spending spike this year.
Most of the folks on Social Security benefits need this money to survive. It’s “put food on the table” type of income.
We’re not talking about a small group of Americans, either.
Nearly nine out of 10 people ages 65 and older receive Social Security benefits. And according to SSA, these benefits make up about 30% of these folks’ total income.
The problem is… the money is running out.
The Board of Trustees’ 2021 annual report noted that the program has paid out more than it has collected in every year since 2010. And it gets worse…
That isn’t expected to change for the next 75 years. It’s a huge problem because the report also said that Social Security’s reserves will be depleted by 2034.
At that point, the trusts will act as a conduit. Money will flow in as the working population pays its taxes. And it will immediately go back out to fund recipients’ benefits.
However, as things stand right now, the taxes being collected at that point will only fund about 78% of the costs. So to put it bluntly… we’re hosed.
Of course, we don’t know exactly how everything will play out. Some type of reform could occur. Heck, a group of politicians could even get together and take it away altogether.
My point is, you need to realize that Uncle Sam can’t support everyone. You must take matters into your own hands before it’s too late…
Save for retirement. More specifically, invest in your retirement.
Don’t fall into the trap of thinking you have all the time in the world to start investing. And please, don’t rely on Social Security as your fail-safe plan.
Even if everything works out, you’ll still need to be invested in the stock market and other investments to retire comfortably. Remember, you only get one chance to do it right…
So don’t count on Uncle Sam. Fund your own retirement. And if Social Security is still pumping out income when your time comes, consider yourself lucky.
Good investing,
Pete Carmasino
