Social security is one of the biggest issues facing America today, and with good reason. All our lives, we’ve been told that this is how the social contract works – we take care of you when you’re young, and you take care of us when we’re old, quid pro quo. Suddenly, however, for the first time since social security was introduced by Franklin D. Roosevelt in 1935, there has been doubt about whether the system will still be around for when the currently-middle-aged need it, let alone their children. The economic system is in collapse and ruin, and everyone in the United States is struggling, except the very wealthy.
Social security benefits have traditionally been paid for by the Payroll Tax – but in 2010, officials warned for the first time that they weren’t taking in enough money to cover the benefits that were being paid out. Anyone who’s ever balanced a home budget will understand that this is not a feasible way to move forwards for anyone. So since then, the benefits funding was instead supplemented by general income tax, although the same officials predicted that if this situation didn’t change, we would be out of money for retirement benefits by 2037, and the disability fund would be completely empty by the year 2017. All of this was without taking into account the payroll tax cut that was implemented to give ordinary hard-working Americans a bit of a boost during the current financial crisis – which means that while we’re going to survive this crisis, we might not be able to survive the much larger one that is coming down the line at alarming speed.
All this begs the question, “Should you be preparing for something other than Social Security?” and the answer is a resounding YES! Social security is a great program, one that keeps many elderly and disabled Americans out of complete poverty, and it deserves a champion in Congress – the American people need to make their voices heard. But that doesn’t mean that you shouldn’t be considering other options for your retirement. IRAs and 401(k)’s are serious options, and you should be sure to speak to a professional financial planner to make sure that your retirement will be the secure and enjoyable time that you saw your parents enjoy – and that you deserve as well! Don’t just rely on social security, make your own plan today!