{"id":13300,"date":"2022-11-04T22:44:08","date_gmt":"2022-11-04T22:44:08","guid":{"rendered":"https:\/\/arrivity.com\/?p=13300"},"modified":"2023-06-27T09:47:00","modified_gmt":"2023-06-27T16:47:00","slug":"the-road-ahead-permission-to-keep-caring-about-social-security","status":"publish","type":"post","link":"https:\/\/arrivity.com\/the-road-ahead-permission-to-keep-caring-about-social-security\/","title":{"rendered":"Permission to keep caring about Social Security"},"content":{"rendered":"

When my 20-year-old daughter looked over\u00a0the<\/mark>\u00a0wage summary for her summer job, she zeroed in on\u00a0the<\/mark>\u00a0money that was taken out before\u00a0the<\/mark>\u00a0paycheck even hit her account. She grudgingly acknowledged\u00a0the<\/mark>\u00a0income taxes, hoping she may get some back as a refund. But Social Security? From\u00a0the<\/mark>\u00a0buzz she\u2019s hearing among her generation, Social Security will be dried up long before\u00a0the<\/mark>y near retirement age. It seems unfair to have to pay for something\u00a0the<\/mark>y feel like\u00a0the<\/mark>y may never see.<\/p>\n

The<\/mark>re\u2019s certainly a lot for\u00a0the<\/mark>\u00a0younger generation to worry about as\u00a0the<\/mark>y look into\u00a0the<\/mark>\u00a0future. So how should\u00a0the<\/mark>y be thinking about Social Security?<\/p>\n

Let\u2019s start with\u00a0the<\/mark>\u00a0obvious: Predicting\u00a0the<\/mark>\u00a0future is fraught. So while nobody can say exactly what\u2019s going to happen 30, 40, and 50 years from now,\u00a0the<\/mark>re are people whose job it is to carefully track\u00a0the<\/mark>\u00a0longevity of\u00a0the<\/mark>\u00a0Social Security fund. In fact,\u00a0the<\/mark>\u00a0latest estimates by actuaries \u2013\u00a0the<\/mark>\u00a0statisticians who crunch all\u00a0the<\/mark>\u00a0numbers around lifespan and economics \u2013 shows that Social Security will run out of funds in 2034. That\u2019s not too far into\u00a0the<\/mark>\u00a0future at all. Even someone like myself, who is thinking about\u00a0the<\/mark>\u00a0when and how of retirement, could start feeling pretty anxious about this news.<\/p>\n

Looming demise, or a high-pressure deadline?<\/h2>\n

It turns out that for financial professionals, politicians, and othe<\/mark>r Social Security watchers,\u00a0the<\/mark>re\u2019s nothing at all surprising about\u00a0the<\/mark>\u00a0projection that\u00a0the<\/mark>\u00a0fund will run out of money in 2034. And this isn\u2019t\u00a0the<\/mark>\u00a0first time Social Security had a looming crisis. It also happened in 1983. That was when\u00a0the<\/mark>\u00a0government enacted a set of changes that put it in\u00a0the<\/mark>\u00a0black. And that\u2019s when\u00a0the<\/mark>y predicted it would be solvent until\u00a0the<\/mark>\u00a0year 2035. (New projections that take into account pandemic-related demographic and economic shocks have moved\u00a0the<\/mark>\u00a0date forward by a year).<\/p>\n

Sensible people may wonder why\u00a0the<\/mark>\u00a0government is waiting until\u00a0the<\/mark>\u00a0very brink to fix Social Security. One word: Politicians.\u00a0The<\/mark>\u00a0solutions aren\u2019t complex: It\u2019s a matter of finding an acceptable balance of cost-cutting and income generating measures. But\u00a0the<\/mark>\u00a0necessary actions are never popular with politicians since\u00a0the<\/mark>y mean a combination of increasing taxes and decreasing benefits.<\/p>\n

Most experts predict, however, that\u00a0the<\/mark>\u00a0changes will get made \u2013 probably as\u00a0the<\/mark>\u00a0deadline becomes unavoidable. Social Security is one of\u00a0the<\/mark>\u00a0most popular entitlement programs in\u00a0the<\/mark>\u00a0U.S., and senior citizens are active voters. Politicians have plenty of incentive to make sure Social Security sticks around.\u00a0The<\/mark>\u00a0changes, when\u00a0the<\/mark>y come, will probably mean that people who are still working will have to pay more into\u00a0the<\/mark>\u00a0fund.\u00a0The<\/mark>y may also have to wait longer to reach an age when\u00a0the<\/mark>y can take full retirement benefits. In addition, future benefits\u00a0the<\/mark>mselves may not cover as much in retirement expenses.<\/p>\n

Social Security and you<\/h2>\n

While it looks like Social Security will get a new lease on life in\u00a0the<\/mark>\u00a0next decade or so,\u00a0the<\/mark>\u00a0potential changes are a reminder to plan carefully for\u00a0the<\/mark>\u00a0financial resources that will fund your retirement.\u00a0The<\/mark>\u00a0truth is, even now Social Security payments only cover a fraction of retirement expenses for\u00a0the<\/mark>\u00a0average senior. My 86-year-old mom, for example, covers about 40% of her budget with Social Security, but her spending has been low, especially during\u00a0the<\/mark>\u00a0pandemic when she hasn\u2019t been able to travel or eat out. Thankfully, my parents participated in employer pension plans and socked away money in IRAs, so she has enough to be comfortable.<\/p>\n

I\u2019ve already helped my daughter set up her first IRA, just as my dad did for me when I began earning real money. Maybe it\u2019s good that my daughter assumes she can\u2019t depend on Social Security. That way she\u2019ll have incentive to start saving early and actively think about retirement even in her 20s and 30s. Money saved now has a longer time to accumulate, giving her more flexibility as she gets older.<\/p>\n

If predicting\u00a0the<\/mark>\u00a0future feels daunting, your Arrivity financial planner can help.\u00a0The<\/mark>y\u2019ll make a careful assessment of your current financials and factor in your plans for\u00a0the<\/mark>\u00a0future, including when you hope to retire.\u00a0The<\/mark>n,\u00a0the<\/mark>y\u2019ll design a\u00a0road<\/mark>map that helps you get\u00a0the<\/mark>re.<\/p>\n

Please contact us at 206.217.2583 or info@arrivity.com<\/a>\u00a0if we can assist you or someone you know with financial planning.<\/p>\n

Liz is a Late Boomer in the sandwich generation who started an independent writing and brand consulting practice after years as a senior marketing executive. She lives in Seattle, Washington. Her mother lives nearby and her daughter comes home during college breaks.<\/em><\/small><\/p>\n

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

When my 20-year-old daughter looked over\u00a0the\u00a0wage summary for her summer job, she zeroed in on\u00a0the\u00a0money that was taken out before\u00a0the\u00a0paycheck even hit her account. She grudgingly acknowledged\u00a0the\u00a0income taxes, hoping she may get some back as a refund. But Social Security? From\u00a0the\u00a0buzz she\u2019s hearing among her generation, Social Security will be dried up long before\u00a0they near […]<\/p>\n","protected":false},"author":6,"featured_media":13839,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/posts\/13300"}],"collection":[{"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/comments?post=13300"}],"version-history":[{"count":6,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/posts\/13300\/revisions"}],"predecessor-version":[{"id":13884,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/posts\/13300\/revisions\/13884"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/media\/13839"}],"wp:attachment":[{"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/media?parent=13300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/categories?post=13300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arrivity.com\/wp-json\/wp\/v2\/tags?post=13300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}