When my wife and I review our retirement accounts and plan how much we need to save to have a good retirement in our Golden Years, we always use the assumption that Social Security will not be there and available to us when we retire. We have decades left to go before we are eligible to retire and draw Social Security benefits in our sixties. That is a very long time, and the system is in trouble now.
It is no real secret that the Social Security system is in trouble. Experts have been preaching their doomsday sermon for years that the Social Security Trust Fund will soon run out of money. Many pundits and politicians say that the Social Security is too big to fail and too much of a political hot button topic to not be available decades from now in some form. But, things have to change. Benefits will have to be decreased, the retirement age will have to increase, or both will have to happen in order for the system to survive. The system in its current form is unsustainable, and that is why I always use the assumption that it will not be there for my own retirement despite paying into the system.
Social Security, which was founded in 1935, is a pay as you go system thanks to the Baby Boomers. The taxes that current workers like me are paying into the system is paying the retirement benefits of the current retirees like my parents. The trick is that we need to have more children ourselves so that they will literally take care of us in our old age. Experts say that the Social Security Trust Fund will most likely be out of money in 2041 just as today’s twenty year-olds begin to retire.
So, the moral of the story is to invest on your own through your Roth IRAs, Thrift Savings Plan (TSP), or civilian 401-k’s as much as you can. Do not count on the federal government for any help in preparing your finances for retirement. You are in charge of your own life and your own destiny. Not one cares more about your financial future than you…especially Washington.