Re-Strategizing Retirement In Light Of Ongoing Social Security Woes

Jan 8, 2019

Re-Strategizing Retirement In Light Of Ongoing Social Security WoesSocial Security is going bankrupt! It’s an often-repeated statement and widely held belief, particularly among those at or approaching retirement age — it’s also not true.1 While the program will effectively deplete its asset reserves by paying out more to beneficiaries than it generates starting in 2018 and through 2034,1 benefits will likely still be available to qualified retirees, albeit reduced by about 25 percent.2

That reduction could mean significant adjustments in lifestyle for the three in five retirees who depend on Social Security for at least half of their monthly incomes, and be even more of a jolt to the three in 10 who look to the program to provide 90 to 100 percent of their retirement incomes.1

The political maelstrom that would probably accompany a Social Security revamp has some experts speculating that Congress will step in before reductions actually take place.3 However, preparing clients for the future based on this type of conjecture could put some of their financial futures at risk. The opposite tact may be the most prudent — what happens if the cuts happen?

Security Beyond Social Security

The Bureau of Labor Statistics reports that only about 23 percent of the 165 million American full- and part-time private sector and state and local government workers participate in some form of pension plan,4 so chances are most of your clients don’t have this supplemental nest egg available to offset any decreases in their Social Security benefits.

That leaves the one reliable solution for lifetime income guarantees: annuities. Annuities — particularly those that offer risk control — could help your clients maximize upside investing potential and offer downside protection, alleviating the strain of a potential or real Social Security decrease during their retirement years.

Seeking Financial Advice

Navigating the uncertainties of saving for retirement can lead to many more questions from investors than just those surrounding the future of Social Security, not the least of which is if it’s time to work with a financial advisor. Quell fears and empower prospects to make the choices that are best for them by sharing the easy-reference guide, When and Why Should I Hire a Financial Advisor? Click the button below to access this valuable tool now.

Guide to Hiring Financial Advisor

SOURCES:

1The Motley Fool, Fact or Fiction: Social Security Is Running Out of Money?, June 15, 2018

2MarketWatch, Social Security to tap into trust fund for first time in 36 years, June 6, 2018

3CNBC, What Social Security’s budget woes mean for your retirement benefits, June 11, 2018

4Pension Rights Center, How many American workers participate in workplace retirement plans?, January 18, 2018

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Topics: Social Security