Social Security Benefits (loans, IRA, credit card, debt)
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I heard that Social Security fund , which we have been paying as taxex for years is going to collapse very soon. Influx is going to be more than outgoing money from the fund after few years. What do you think, can be the ideal solution to make sure that govt has enough money tp support us when we grew older?
If "they" hadn't continued to raid the Social Security fund and used its funds for all sorts of other things, it would probably be fine for quite a while. There are several things they could do, one is take away the limit that they currently have in place (you only pay S.S. to a certain income level) and another is taking other income in your retirement years into account. If someone is getting pensions and has lots of other income, that could diminish what they get from S.S. We have to make sure that people do not end up in the street in their old age. Also we need to encourage people to save more on their own, in IRA's, 401K's etc. Lots of people do not do that.
Nothing is going to be perfect...but we need to come up with SOMETHING.
In my humble opinion, if you are counting on Social Security to "support you" when you get older, you are living in a cave. Medicare is slated to run dry in 2019, Social Security in 2040. Social Security never was designed to support anyone, it was designed to supplement. I am living with the idea the program does not even exist, and there are many folks that need it, i.e. children whose folks die prematurley, disabled, (really disabled, not those that act disabled) etc. Once again, if you count on the Government and politicians for everything you will get what you deserve. What ever happened to "Ask not what your Country can do for you, ask what you can do for your Country..."
If "they" hadn't continued to raid the Social Security fund and used its funds for all sorts of other things, it would probably be fine for quite a while. There are several things they could do, one is take away the limit that they currently have in place (you only pay S.S. to a certain income level) and another is taking other income in your retirement years into account. If someone is getting pensions and has lots of other income, that could diminish what they get from S.S. We have to make sure that people do not end up in the street in their old age. Also we need to encourage people to save more on their own, in IRA's, 401K's etc. Lots of people do not do that.
Nothing is going to be perfect...but we need to come up with SOMETHING.
I'm not going to give you numbers - because I can't - so take this as my opinion:
Since the 70's and 80's, roughly half of Americans have been living in bleak financial circumstance as a day-to-day occurence. Many Americans drive $500.00 cars as a primary vehicle. Many Americans have never been able to afford a computer - and never will. Many Americans do not have Phone Service - let alone cell phones and Blackberrys. Many Americans have no health coverage of any kind. These are known as the "working poor" and there are more in some regions than in others - depending on who recovered from the Reagan years and who didn't.
Thus, many Americans have been unable to tuck away a thin dime for retirement! Many Americans cannot afford $100 bucks for a Savings account - let alone an IRA!
All these folks have to look forward to is SS. We can blame whoever we choose (I blame a certain political group who often mismanages balanced-budgets when handed to them) - but the problem is real, is not the fault of the citizenry (some exceptions noted) and is not being addressed.
Rest assured, the current political-machine-in-charge will do nothing as they have turned a blind eye on the populace that employs them - and it may be too-far wrecked to save this time (SS). I invite one who can quote for sure how the administration prior to this one secured SS for the future ... and how this administration wrecked it ... again ... to provide this info.
It should be noted that our SS system has not even been in effect for 100 years ... I still think all the money the US sends to foreign countries for surrepticious purposes should be added to the fund.
Most people don't save much, they spend, spend, spend, it is the american way. People have higher credit card debts than ever before and a lot of them live way above their means. They are NOT saving for retirement. That is the reality. Also most older clients of ours (I work in a tax office) get pensions that are sometimes quite sizable. Most companies don't offer pensions, only 401K's anymore. If you invest in stocks and the market crashes...well, there goes your retirement. It will be a mess, for sure.
I am really concerned about this with regards to my mother -- 55, with no savings. I'm 22, but I have decades to squirrel something aside for myself, and she doesn't. I'm planning to open a Roth IRA as soon as I get my bank account built back up, Suze Orman says that its more important to concentrate on your retirement than on saving for your kids' college -- it's nice to be able to put them through school, but they can always get loans or grants, and there's nothing like that for your retirement.
Rocky... I agree with your post. In the DC area most people make good money, yet there are many who do not have the funds to save anything for retirement. Most of the jobs where people used to be able to make fairly good money without advanced education are now gone, FOREVER... to China, India or where ever companies can save money (and give millions to the CEO's) All that seems to be left for those people unable to get a college degree are service industry jobs that are NOT living wage jobs. It doesn't look good for the future IMO.
That's exactly why I left MD/DC area -- low-wage jobs, high-cost of living, and gridlock. I may starve down here in MS, too, but at least I'll starve on a beach with some trees nearby, and I don't have to sit in traffic 7 hours just to get to the airport.
Social Security will continue... you may see changes in benefits and more stringent means testing but the program will continue.
Health care is a much larger financial issue so expect major changes in Medicare and Medicaid programs in the coming years.
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