Do You Count On Social Security?
The trustees of Social Security and Medicare just estimated that the fund will run out of the money sooner than expected. So if you are a Generation Xer or younger and count on Social Security as part of your retirement, you are going to be very disappointed.
By 2017: System is not taking in enough in payroll tax to cover payments
By 2040: Social Security trust fund will be exhausted. The System will only be able to pay 74% of currently promised benefits.
By 2018: Medicare trust fund will be depleted
According to this CNN article, although the debate has been going on for a while as how to fix the system, nothing has been done and the debate itself is currently put on hold and nobody in the White House seems to care about this issue. So mostly likely, the corrective measures will include one of both of the following: tax increases or benefits reduction.
Yes, I am kind of pissed at what I see. I make more than 94K a year, meaning, I pay maximum amount of Social Security and Medicare each year, plus the 7.65% that my employer matches. You are talking about tossing 15.3% of my wage in a basket that is promised to be mine but may not be there in 30 some years.
Most of the Financial Advisers I have encountered suggest me not to include Social Security in my retirement plan. The whole purpose of the program is to pay tax now so we can collect our retirement benefits later. Now, seeing the promised benefits vaporizing little by little because of the government failure, I really feel that I am robbed. What is your take on that? Do you count on or partially count on some payouts from Social Security for your retirement?
If Social Security reform does happen, I would opt for privatizing the funds. Give me that 15.3% and I will invest the money myself. That’s like another 401K! It means a $50K salary can generate $7500+ additional savings each year! And I am sure a lot of us are capable of managing the money ourselves and do a whole lot better job than the govoernment.