Understanding Social Security and Its Future
July 18, 2012 By John Rogers Burk, A Law Corporation
Most of us have heard all the dire warnings about the future of the Social Security retirement program. Some analysts tell us that the program will cease to exist within just a few short years. Others tell us that beneficiaries are certain to see reductions in benefit checks while still others tell us not to worry--a solution is just around the corner.
Knowing which analysis is correct may be impossible, but understanding the program, the problem and the possible solutions should help you plan for your retirement.
The Program: The Social Security retirement program began in 1935. The purpose of the program is to provide workers a monthly benefit amount once they have reached retirement age. The amount of the benefit is largely dependent on the amount you have paid into the program over the years. In 2012, the average monthly benefit amount is $1230. Although this may seem like a small amount, statistics show that as many as 20 percent of elderly Americans depend solely on Social Security benefits to fund their retirement. Many more consider Social Security benefits to be their main source of income during their golden years.
The Problem: The problem facing Social Security is that the baby boomer generation gave birth to considerably more babies than expected because of the huge number of soldiers returning home from World War II. Those babies are due to retire in the coming years. In addition, the decades since the baby boom have seen a steady decline in the birth rate. Therefore there will not be enough workers to pay benefits for the vast number of people due to retire in the coming years.
The Solutions: No one knows which solutions will be enacted, but there are some that have been frequently discussed. Raising social security taxes for workers is one solution. Raising the retirement age is another option. As the system stands now, you will receive considerably more each month if you delay your retirement until you reach age 67. Congress could make this the minimum age at which you can receive benefits. Lowering the yearly cost of living increase and/or lowering monthly benefits are also potential solutions to the problem.
Given the uncertain future of the Social Security retirement system, make sure that you create a retirement plan that does not depend on Social Security by consulting with both your financial advisor and your estate planning attorney.
ABOUT THE AUTHOR: John Roger Burk
Experienced estate planning attorneys Roseville CA of the John Rogers Burk, A Law Corporation offers estate planning and business planning resources to residents of Roseville CA.
Copyright John Rogers Burk, A Law Corporation
More information about John Rogers Burk, A Law Corporation
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
The Program: The Social Security retirement program began in 1935. The purpose of the program is to provide workers a monthly benefit amount once they have reached retirement age. The amount of the benefit is largely dependent on the amount you have paid into the program over the years. In 2012, the average monthly benefit amount is $1230. Although this may seem like a small amount, statistics show that as many as 20 percent of elderly Americans depend solely on Social Security benefits to fund their retirement. Many more consider Social Security benefits to be their main source of income during their golden years.
The Problem: The problem facing Social Security is that the baby boomer generation gave birth to considerably more babies than expected because of the huge number of soldiers returning home from World War II. Those babies are due to retire in the coming years. In addition, the decades since the baby boom have seen a steady decline in the birth rate. Therefore there will not be enough workers to pay benefits for the vast number of people due to retire in the coming years.
The Solutions: No one knows which solutions will be enacted, but there are some that have been frequently discussed. Raising social security taxes for workers is one solution. Raising the retirement age is another option. As the system stands now, you will receive considerably more each month if you delay your retirement until you reach age 67. Congress could make this the minimum age at which you can receive benefits. Lowering the yearly cost of living increase and/or lowering monthly benefits are also potential solutions to the problem.
Given the uncertain future of the Social Security retirement system, make sure that you create a retirement plan that does not depend on Social Security by consulting with both your financial advisor and your estate planning attorney.
ABOUT THE AUTHOR: John Roger Burk
Experienced estate planning attorneys Roseville CA of the John Rogers Burk, A Law Corporation offers estate planning and business planning resources to residents of Roseville CA.
Copyright John Rogers Burk, A Law Corporation
More information about John Rogers Burk, A Law Corporation
View all articles published by John Rogers Burk, A Law Corporation
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
