Looming Social Security Cuts
You may have heard of it at this point, these looming Social Security cuts. So, laborers’ payroll taxes haven’t been sufficient to cover retired people’s benefits. So we’ll see where this goes but as of right now they are projecting that by 2034 it’s estimated that benefits could be reduced by as much as 23%. So there could be an answer before 2034 but it can’t hurt to be prepared. I’ll give you three ways to prepare yourself for this. First, increase the amount set aside for your investments. As you probably experienced over your lifetime, that benefit of compounding and how that can ultimately can help you in a long-term plan. So even if that means, well, I am going to set aside an extra $100 a month as an example, you know, over the course of the year that’s S$1,200 a year. But as you figure if that’s over a 20, 30 year period and you’re getting some type of reasonable growth on that money, then all the better for you as you plan for your retirement. Number two, decrease your retirement cost. I know this doesn’t sound like a fun one. But what if you’re able to start paying a little bit extra on your mortgage and you’re able to have that mortgage paid off by the time you get to drawing Social Security? So you have the mortgage paid off, you know, other debts ideally, if you’re paying a higher interest rate on credit card debt, that would be one to definitely focus your attention on and get that paid off. What about different vehicles that you owe money on? Other other toys that you might have, boats, or four-wheelers or whatever that might be, that ideally you have those paid for and not owing anything further. Another idea: What about maybe moving to a lower-cost area in the United States or overseas perhaps? But that way then you aren’t spending as much money. And maybe it’s cutting out some of those unnecessary expenses. Have you looked lately at your monthly credit card bill and what different subscriptions you have? I know today, now it seems like a lot of the way people watch television isn’t the same as it was before. They download these different apps and they’re paying monthly fees for those. Are there ones that you really don’t use or need anymore? And the third idea would be the idea of delaying claiming your Social Security benefits. So again, you can start at age 62 or defer all the way out to age 70. But somewhere your full retirement age is around age 67, depending on what year you were born. And maybe it’s perhaps at that point you collect your benefits but you still work part-time. So there’s different ways to look at Social Security and how to ultimately get the best befit for you.