Depending on Social Security benefits to sustain us financially through retirement is like expecting money to fall from the sky. Heck, there may even be a greater chance at the latter. As if the difficulties and health concerns that arise with old age weren’t enough, many of us will soon find that all the working years we’ve spent paying the government Social Security taxes, may not even compensate as any source of viable income when our turn comes along to retire. And we’re not just talking checks we’ll receive in the mail, this will very well affect medicare among other benefits. As American taxpayers continue to fund this flawed system, awareness for alternative measures has become increasingly apparent.
So, why is it that we spend our entire working lives contributing to this system, yet there is no guarantee we’ll all be able to receive benefits? And if we do claim these benefits, why do many of us have to pay taxes on those benefits? Are we just assuming the government owes us something when we retire?
Well, for starters, there simply isn’t enough money to go around. Social Security sends retirement and disability checks to millions of American people. The 2014 Social Security Trustees Report, projected that the Social Security trust fund will run out of money in 18 years, or by 2033, which is right around the time when GenXers are retiring. Although, we’ll have to wait to see if the system will collapse by that point in time, we can most likely anticipate reduced benefits until then.
If some of us are lucky enough to receive Social Security, we’ll also find that it will barely put a dent in our monthly expenses. Many Americans, well within the retirement age, have come to the realization that they can’t stop working. They know they simply can’t live off of Social Security alone. It just isn’t enough. Sure, they can start claiming Social Security benefits, but if your combined household income exceeds $25,000, you can also expect to pay increased taxes on that Social Security income. For some people, it may not even be worth claiming these so-called “benefits”.
And by the time Millennials and Generation Z, reach their retirement years, the thought of what once was an additional source of income will soon be considered a lesson in history. Ironically, Millennials must continue to fund Social Security and disability to millions of people through their contributions in tax-dollars, despite forecasted trends. This generation has also realized they can only rely on their own efforts if they want to retire. Because of this looming reality, they have taken the initiative to start saving and investing early on for retirement.
Adding to the irony surrounding this system devised by our government to help the American people retire more comfortably, what may come as a surprise to some, is that even eligible, non-citizens can receive benefits as well. Over the years, this has caused much controversy and discontent among American tax-payers in the workforce. The thought of their tax-dollars supporting foreign aliens, is one that doesn’t resonate well with everyone.
The unfortunate reality is that majority of us simply cannot depend on Social Security alone. While life expectancy continues to increase, more people will find that they may outlive their savings. It has become a necessity to have a back-up plan. A retirement plan that includes strategic investments to grow your wealth and prepare you for a comfortable retirement. More importantly, one that will guarantee you will have a source of income throughout those years. And when it comes to investing, many of us look for lowisk options that can increase our savings for the road ahead.
A Limited Partnership with Jakob Pek Fund can help you earn a higher interest rate on your investment, so you can save more for your future.