Every few years politicians hold up numbers claiming that Social Security is going to go broke. They remind me of the story of the physicist that conclusively proved that bumblebees could not fly. Realistically speaking, there is no way for Social Security to go broke, so long as the United States exists.

Social Security is backed by the full faith and credit of the United States. As you might be aware, the federal government continues to borrow money to fund deficit spending. So in the range of things you have to worry about for retirement, the possibility of social security becoming insolvent seems to correlate directly with the likelihood of a giant asteroid taking out the United States.

What You Should Worry About: Insolvency aside, Social Security will need to be reformed in the future, as it has several times in the past. Solutions that are proposed include raising the retirement age, curtailing benefits, and taxing a higher level of worker’s income. All of these options short of raising taxes will result in even less benefits. Even, as it stands now, nobody could rely on Social Security and expect to “retire rich” by any stretch of the imagination.

The Point Of Social Security: Younger people forget that before Social Security, the term elderly was synonymous with poverty. Social Security was invented as a way merely to avert destitution, not to continue living in anything approaching a comfortable lifestyle. Today, workers should look at Social Security almost like welfare; it is the ultimate safety net should some personal, national, and international financial catastrophe occur. It is an insurance policy against the unthinkable that will allow you minimum food and shelter in the absence of proper retirement planning.

Social Security And Your Retirement Planning: Once you reach this mindset, away from both the paranoid delusions of insolvency and fantasy of a comfortable retirement funded by Social Security, only then can you begin to properly plan your retirement strategy. While you may wish to consider Social Security to be one aspect of your retirement planning, there are several reasons you might decide not to.

For one, there is no way to know what the Social Security age of retirement will be in the future. Secondly, the benefit is so small, relative to what it would take to retire comfortably, let alone rich, that it almost isn’t worth considering. So many people these days just plan their retirement without factoring in Social Security, and just figure that they will be pleasantly surprised when they ultimately receive their benefit. It is great to live in a country where our elderly are not mired in poverty, but no one should be fooled into thinking that Social Security should be anything more than the most minor aspect of your retirement plan.

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