Have you ever read your Social Security statement? Most of my clients say, “No”. Many people simply get it in the mail and stash it in the pile of papers for shredding at best or toss it in the trash as soon as it arrives. But the reality is, you need to know what it tells you. You should be kept abreast of what could potentially be available to you in your retirement years. Although I don’t factor in Social Security benefits when I am creating a Financial Needs Analysis (FNA) for my clients, I encourage you to get familiar with the verbiage the next time you receive the paperwork from the Social Security Administration. Read it. There is a lot of valuable information stuffed within the four page fold out.
Let me share a few key things on the Social Security Statement:
- “Social Security was never intended to be your only source of income when you retire. You will need other savings, investments, pensions or retirement account s to make sure you have enough money to live comfortably when you retire”.
- “In 2016, we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits”.
- “If you were born before 1938, your full retirement age is 65. Because of a change in the law, the full retirement age will increase gradually to 67 for people born in 1960 and later”.
Most people don’t plan to fail they fail to plan. And there is a high price to pay for waiting to create your families financial solution. As a result, a lot of consumers are disillusioned to believe that they will be able to draw from the benefits of Social Security when they retire. The problem with that is, although YOU may be contributing to the Social Security fund through regular payroll deductions, what YOU contribute isn’t being banked for YOU when YOU retire. It’s a first-come-first-served program. And if there is nothing left for YOU when YOU retire, oh well. The crazy part is, the Social Security Administration told you to find another alternative. But because most people haven’t read the document, they haven’t a clue.
Listen, no matter how old you are right now, you will retire one day – God willing. Because the retirement age has increased, people are having to work longer which means they enjoy less and less time spent in their “golden years”. If you haven’t done so already, begin taking steps to create an incredible financial future for your family. Don’t depend on Social Security or any other system to sustain your loved ones. Make sure that you are dotting the “i’s” and crossing the “t’s” for yourself. Save! Invest! And do it aggressively so that you don’t retire broke. In that way, if there isn’t anything available for you with Social Security, you would have already prepared yourself for the coldest days.
Until next time,
Regional Vice President (Primerica)