Do you ever dream about what your retirement will look like? Do you plan to visit certain places or volunteer for a certain organization? Maybe you look forward to just taking it easy and getting caught up on your hobbies.
Are you counting on Social Security for a large portion of your retirement income? If so, please read on. What I am going to tell you could help you get to retirement in good financial shape.
We have been led to believe that the Social Security Trust Fund will be there for us when we retire. Depending on your age, there may be some form of Social Security, but it will be nothing like what retirees have enjoyed the last 70 years or so. If you are under 50, chances are, Social Security will not be there for you at all.
This is not new information. In fact, congress was first made aware of the fact that the Social Security Trust Fund was unsustainable way back in 1955. Have they done anything with that knowledge? No, instead they added the Medicare and Medicaid plans to the mix, making the whole system even more unsustainable.
First, you need to realize that there is no real Social Security Trust Fund. The money is collected, checks are cut for current retirees, and the rest of the money is deposited in the general fund to be spent as the government sees fit. There is no investment of our money to help build our retirement funds, it has been spent. All of it.
Second, the demographics of the U. S. are showing a rapidly aging population. Between now and 2030 the number of Americans over the age of 65 will grow from 40 million to 78 million. During this same time, the number of workers supporting Social Security will drop until there are only two workers supporting every retiree.
In 1999, Peter G. Peterson, the chairman of the Council on Foreign Relations and chairman of the Blackstone Group, wrote a book titled, “Gray Dawn: How the Coming Age Wave Will Transform America-And The World. " In it he estimates the total unfunded liabilities of the Social Security Trust Fund to be $10 trillion. That was 1999. Now that number is estimated to be in the range of $77 trillion. That's trillion with a “T. "
What if the government were to wake up and try to fix the problem? Well, according to Peterson, in 1999 it would cost the government $750 billion per year for the next 30 years. Add to that Medicare and the annual amount jumps to $1.5 trillion per year. Now, the total U. S budge is expected to be around $2.7 trillion for 2008. That means the over 50% of the current budget would have to be used to fund these two systems and that is based on 1999 figures not the larger more recent number of $77 trillion.
If the government is not funding Social Security, Medicare and Medicaid then how will the government pay the recipients? There are only three ways: (1) collect more revenues; (2) borrow the money; (3) print the money. The results: (1) a tax revolt; (2) rising interest rates and a collapsing economy; (3) the destruction of purchasing power and also the lifestyle of anyone dependent on Social Security. Not a pretty picture no matter how old you are.
What this means is that most of us will have to continue working to make ends meet and we must set aside funds to sustain us when we can no longer work. If the government will not or cannot do it then we must.
Are you headed for a miserable retirement? Not if you act now. Learn more by visiting our website today: http://www.avoiding-bankruptcy.net/5things.html