Social Security

 

March 18, 2022



Americans may not bond on everything, but AARP’S Bulletin about the future of Social Security finds them in agreement on its importance. The program, now 86 years old, has had challenges in the past and will continue to have them into its future. Many Americans say it is their only source of income, depending on myriad government and community programs for supplement.

Financial advisors have always promoted the “three-legged stool” system for retirement. Social Security, pension, and savings. Unfortunately, many have only one or two legs to balance, a perilous act. Home ownership is the only investment some have been able to make, and after retirement, maintenance, taxes, and utilities have made it a struggle. There are home equity loans and reverse mortgages, but those are stop-gap measures and inflation is accelerating their meltdown.

That’s why confidence in Social Security’s future is so critical. Congress can’t raid Social Security, and in spite of the pandemic the reserve grew by $2.8 trillion in 2020. There is a concern that aging Americans are putting a strain on a system that relies on contributions from the work force. There have been proposals to place funds in the stock market instead of treasury bills, but the risk has outweighed the benefits.

Many of my friends have begun to draw at age 62, several years before their full retirement age and have continued to work, earning up to $19,560 before benefit reduction. Early retirement is a personal choice, because nothing is sure but death and taxes.

 

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