Perhaps you saw this headline and felt your stomach sink to the floor. Social security has been on a downward spiral for many years. The current prediction is that it could completely run out in 2035.
With each new presidential administration, there's a commitment to shore up the program, reduce benefits and get it back on course but inevitably more critical issues arise and the looming shortfall of social security continues to be placed on the back burner.
Much like climate change, the boomer generation is ignoring the bill that will eventually come due and the younger generations (X, Millennial, and Z) will suffer the consequence.
I'm not a public policy expert, but it's my firm belief that Medicare and Social Security are too important to completely neglect. My hope is that Congress will remedy this shortfall before it's too late.
In the absence of government leadership, it's prudent to prioritize retirement savings above all other financial goals. Begin saving and investing early in an IRA or 401k. Let the power of compounding interest build momentum to carry you through higher spending years in your 30's and 40's. Most people will need to save more than the max allowed IRA or 401k amount (currently $6k/yr and $19,500/yr respectively). I encourage clients to open a brokerage account earmarked for retirement. This will turbo charge your retirement savings and reduce your reliance on Social Security.
If you reach your 70th birthday and find that there's very little Social Security benefits left, you will be thankful that you saved above and beyond what you thought you would need. And if, by some freak of nature, there's ample Social Security benefits to provide a comfortable lifestyle...then good for you! Go big in retirement and reward yourself for saving diligently over the course of your life.
I realize this approach is easier said than done. Life is long with many twists and turns. A financial plan that is both durable and malleable will provide guidance as you navigate short and long term financial goals. Let's get started - I can walk you through how to fund a resilient retirement.