It’s no surprise that at some point Social Security will have to be revamped. There just aren’t enough workers contributing to the already retired and soon to be retired baby boomers’ generation. So guess who gets the short end of the stick? Gen Xers through the Millenial generation and then some. And I wouldn’t necessarily describe it as the “short end” for the under 40 crowd. There’s still plenty of time to beef up individual retirement accounts. It’s just that we will have to take more responsibility for our income during our retirement years while still contributing to the Social Security fund in the meantime.
The same is true for government and public worker pensions. I recently received my annual pension newsletter outlining the coming changes. A nice pie chart graphically illustrates that our pension fund will only cover about 60% of my expenses in retirement. Again, I’m not surprised. Instead, I was anticipating this change, hence all the 403(b) and 457 flyers I’ve been receiving these past two years.
No matter who our president is today, these issues will affect current and future generations. I’d personally like to see something done sooner than later – changes made now would allow the under 50 or 45 crowd to plan accordingly. It would also give the 20-somethings a heads up and a head start on retirement planning.
I’d guess that most people aren’t counting on their Social Security benefits as their only source of retirement income, but if it’s part of the equation, it’d be nice how to piece the retirement puzzle together – similar to my pension pie chart.
Hopefully we’ll see some changes within the next few years.
What changes would you want to see to Social Security?
9 Comments
Social Security is probably one of the easier things that could be fixed, but for some reason nobody wants to. Push the age out 1 year for people 46-50, 2 years for 41-45, 3 years for 36-40, and 4 years for people 35 and under, and it would probably extend the life of the system for decades.
I think they have to raise the retirement age because we are living much longer. Secondly, they could raise the limit dedcted each year. It would make the progranm more sound.
@Krantcents – They’ve already raised the retirement age on my generation. I believe it’s either 67 or 72. It’d be great if they let people choose a plan where people could convert their current benefits to something more like a 401(k) or mutual fund. I’m guessing that won’t happen, but I’d like more control over this benefit myself.
I have kinda just given up on this. Doesn’t look like they are willing to do some of the simpliest things. Extend the ages out. Sure people will be upset but heck most of them aren’t saving for retirement themselves. We need more edcuation about savings and retirement and stop depending on the government. Stop buying all the 30-50K cars and huge homes and save some money.
@Thomas S Moore – I agree with increasing financial education. There’s very little of that out there and people are just ignorant on what to do to get their finances in order. At some point, I’m guessing Social Security will have to be revamped, but it will be painful for many.
They need to delay social security benefit payout. People are living too long these days. Reduce benefit for super rich people. Unfortunately, they’ll probably need to raise tax a bit too.
@Joe – I’m guessing these changes will occur before I turn 60. Perhaps they’ll adjust the benefit amount based on incomes, I don’t know.
Since Mr. BFS quit teaching after 6 years, we obviously are not expecting much at all from his pension. They say he’ll be getting like $200 a month, lol (I don’t think that even takes inflation into account…). We don’t take Social Security into account as we make our retirement plans, but I actually do think we will get something. Honestly, that will probably be our fun money and we’ll cover all of our main expenses…
@Crystal – I’m pretty sure he has the option to roll it over to a 401(K). I know that for teachers who leave the profession many years before retirement, this is what they do, unless of course he plans on going back at some point – then don’t touch the pension!