It comes as no surprise to me and I'm sure most U.S. workers that our Social Security system is broken and in need of some major repairs. The U.S. Treasury Department has recently been urging congress to take steps towards fixing the looming disaster.
According to a National Underwriter article "beneficiaries may face dramatic benefits cuts sometime around 2041, when the program trust fund runs dry." You read that correctly, "run dry." This latest imploring of Congress comes in briefs issued by the Treasury to Congress.
One way to fulfill the Social Security promise according to this brief would be to do the following:
“Consider a policy of closing Social Security’s permanent financing gap by immediately increasing the payroll tax rate by 3.5 percentage points,” officials write. “This policy would affect all current and future workers. If the tax increase were instead delayed until 2041, when the trust fund is projected to be depleted, the requisite tax increase would be 5.8 percentage points.”
The Treasury brief goes on to say:
"Taking action now will allow people who most depend on Social Security for their retirement income to be shielded, and will allow a more gradual transition to a sustainable system."
Anyway you slice it those who will be depending heavily on Social Security benefits during retirement may be headed for a bleak financial future. I can't stress enough the importance of saving or investing in multiple vehicles so as to not depend on Social Security.
For someone like me, in his/her 30's, relying on social security would be simply foolhardy! In fact, the current numbers lead me to wonder if this form of "insurance" will even exist when I am old enough to receive benefits. I think it is wiser to take investing matters into one's own hands, in this regard, alas.
Jerry
www.leads4insurance.com
Posted by: Jerry | October 3, 2007 9:02 PM | Permalink to Comment