Some concerning news was recently released by the Social Security Board of Trustees. In its annual report outlining Social Security’s financial health, Trustees reported that the joint assets of the Old-Age and Survivors Insurance and Disability Insurance trusts will be exhausted in 2036. What does this mean to those relying on Social Security as a component of their overall retirement income? It means beneficiaries could expect their benefits to be reduced by nearly 25% from previously scheduled levels.
“The current Trustees Report again reflects what we have long known to be true – we need changes to ensure the long-term solvency of Social Security and to restore younger workers’ confidence in the program,” reported Commissioner of Social Security, Michael Astrue.
In a press briefing on the report, Labor Secretary Hilda Solis said, “While trust fund income and earnings are projected to cover costs for a few years, the trust fund assets will ultimately be used to pay for benefits.”
Unfortunately, the rapid depletion of the trusts isn’t the only concern. Not only is our government paying out more in Social Security benefits than ever before, we are also in the midst of an environment in which less than anticipated is being paid in to the program.
“This is especially important as the unemployment rate remains unacceptably high,” Solis added. “Loss of wage income has and continues to be devastating for working families across the country. But it also erodes the payroll tax base – the revenues from which are needed to pay current program benefits.”
(CLICK HERE for recent employment statistics from the U.S. Department of Labor.)
For many years, millions of Americans have questioned the certainty of Social Security for the generations to come. Now, it’s apparent that the issue may come home to roost even sooner than expected – affecting the retirement of millions of Baby Boomers. An expiring public retirement program paired with the virtual disappearance of traditional employer-sponsored pension plans places the burden of generating a reliable retirement income squarely on the shoulders of the retiree.
After a lifetime of earning wages, investing and saving, the transition to using your retirement savings for income purposes can be a very tricky one. Without knowing exactly how long you’ll need your retirement income to last, determining which financial vehicles to use can often feel like a “shot in the dark” or an educated guess at best.
When it comes to our clients’ retirement, we don’t subscribe to the notion of educated guesses and crossing your fingers. In fact, we believe “retiring on hope” is altogether foolish. For years now, we’ve be helping valued clients create sound retirement strategies – solutions which help increase their peace of mind, ensure their continued lifestyle and provide guaranteed retirement income they can’t outlive – no matter how long they need it. While much of the current financial uncertainty seems outside our control, there are still several steps you can take to help ensure the days ahead. To take advantage of a complimentary Retirement Income Analysis, simply contact our office today!
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.