The collision of demographics and math is coming to the welfare system.
Lance Roberts
It has been my firm conviction for some time that the United States Social Security System cannot be trusted as a source of income for retirement.
Of course, there are many voices on all sides of the topic. Some, like Lance Roberts, argue that social security funds will run out as soon as 2035. Others claim that we should not worry because the government will surely find a way to fix the problem. I lean toward the former, and I think you should, too.
If I’m wrong, then no harm is done and we’ll all live happily ever after collecting our monthly social security and medicare benefits.
But if I’m right, then everyone who counts social security and medicare benefits as a cornerstone of their retirement plan will find themselves in deep doo-doo when the time comes.
A Deficit of Dollars and Diapers
“The program’s payouts have exceeded revenue since 2010, but the recent past is nowhere near as grim as the future. According to the latest annual report by Social Security’s trustees, the gap between promised benefits and future payroll tax revenue has reached a staggering $59.8 trillion. That gap is $6.8 trillion larger than it was just one year earlier. The biggest driver of that move wasn’t Covid-19, but rather a lowering of expected fertility over the coming decades.” – Stark Realities
Quoted in Retirement Crisis Faces Government And Corporate Pensions, Lance Roberts, https://www.zerohedge.com/personal-finance/retirement-crisis-faces-government-and-corporate-pensions
The main problems described by Roberts in the above referenced article are:
- Increased life span of current and future retirees means that more people are collecting benefits – and for a longer time – than the system can handle.
- The pool of people who qualify for benefits has increased dramatically since the programs inception.
- The decline in the birth rate in the U.S. means that the number of current and future workers whose taxes feed the system has been diminishing for decades and is now past the “point of no return.”
You Need a New Plan
Whether the Social Security System can be or will be fixed by the time you and I retire is for the experts to solve and the politicians to work out.
The central question is this: are you willing to wager your future – your financial security in retirement – on their ability to do so?
That’s a chance I’m not willing to take.
“We’re from the government and we’re here to help” are not words I want to live by. If we rely on “hope and change,” we’re likely to be left with very little change in our pockets. And with inflation, even cat food may be out of reach as a menu item.
No one is coming to save you.
That leaves us with the responsibility to create our own future prosperity.
And every day that passes puts us further behind and makes the challenge even greater, the task more difficult, and the hill harder to climb.
Embrace the Suck and Get Busy
I don’t like this any more than you do.
It truly sucks. But it’s the reality we live in and it’s not going away.
If you’re like me:
- you’re not wealthy
- you don’t currently have enough to fund your desired future
- no one is coming to save you
I’ve been puzzling over this for a long time and have discovered that merely saving more, cutting expenses, and even owning a few small rental properties are not enough to fill the gap. Those certainly help, and you should do those things if you can. But, if you’re middle aged, time is not on your side.
You need to find ways to increase your income NOW in order to save and invest for the life you want and need in the coming years.
I know you work hard every day, you’re tired, probably have little free time, other responsibilities, etc. I get it. I’m in the same boat. And so is everyone else.
But whining and complaining has never got me anything good in life.
You can make excuses or you can build your desired future. You can’t do both.
Become An Encore Entrepreneur
I just made that up.
But, it’s what you and I must do to achieve the life we desire – the life we’ve worked so hard for – that we’ve looked forward to and dreamed about – yet which seems to drift farther from our grasp each day.
Only by taking charge of our own destiny and shaping reality to our own will can we achieve our dreams.
If you want to party in retirement, then you’ve got to fight for your right! (- Beastie Boys)
I’m convinced that the only way for most of us to obtain the life we want is to be in business for ourselves. And I’m not talking about becoming fabulously wealthy, although I’m sure we all would like that.
I’m talking about generating enough additional income to fund a comfortable and secure future – whatever that means to you.
Now, before you stop reading because you think this isn’t for you, please stay with me a bit longer.
There are many ways to do this, and I’m sure you can find something if you think deeply and do some curious exploration.
Here are some ideas to get you started down the path:
- What skills, abilities, interests, experience, or hobbies do you have that you could teach others, either online or in person?
- What skills, abilities, interests, experience, or hobbies do you have that could be turned into a business?
- If you have expertise in a particular field or skill, consider starting your own business (a consulting side-hustle?) to lift the lid on your earning potential.
- Learn a new skill to either get a higher paying job or start a side-hustle.
- Purchase an existing business and use your knowledge, experience, and insight to take it to the next level. There are thousands of businesses for sale and many resources to help with this.
- These are just a few of the many ways to bridge the gap for retirement. Once you begin searching for options, new ideas and opportunities will be discovered.
Your future is up to you. You alone are responsible. Your future will be what you make it. Even if you choose to do nothing more, you are making a bed that you will eventually have to sleep in.
The Social Security system that helped support our parents and grandparents probably won’t be there for us when we need it.
We need a new plan for retirement.
I urge you to take action and do what is necessary to create a comfortable and sustainable future for yourself and your family. Don’t leave it for others to decide or provide.
I wish you the best!