Will your Grandchild be able to Count on Social Security

Will your Grandchild be able to Count on Social Security Benefits the Way you Do?

Everyone's worried about the future of the whole Social Security concept. Of course the economy is slow and the government is kind of overbudget on everything; but it's been this way before and economic trouble has never been a reason for existential anxiety: no matter what, you always knew that you would get your Social Security benefits check from the government. There's nothing that actually foretells of anything specific, but experts in public finance do see the stage being set for a major cutback. Public debt is at an all-time high and getting higher, and the lawmakers seem to be exhausting the places they can cut back. Sooner or later, they'll think of Social Security benefits; not least because the savings there can be huge.

For the first time this year since the Social Security system began in 1937, expenses will overtake income. The system does have its own independent sources of income; but still, the capital the system works out of will only be enough to help it meet its obligations to the end of its first century in existence - even when you count all future tax income. Starting 2038, there's going to be kind of a shortfall - shortfall by a quarter.

How is the government going to bolster the books of the Social Security benefits package? The first is the earnest intention of the government to raise the working age to 70. If you have more than 20 years to retire still, this could apply to you. They also plan to raise Social Security payroll taxes, raising taxes in general, and then in the end, to simply cut down on your Social Security benefits package - no more cost of living raises.

So what exactly does all this mean in real world terms? Certainly, it should mean that you will need to cut back on some of the nicer touches that make life bearable - taking in the theater, eating out, the music lessons for your grandchild - all begin to look like luxuries. But more importantly, people are going to have to begin saving or contributing to their retirement package way, way early - more like from their first day at work.

When you consult with a retirement financial advisor, you'll probably find them painting a pretty dark picture of your future if you forego some hefty sacrifices today in savings. And if they raise the retirement age to 70, that'll mean waiting three more years than you now do. On the whole, experts believe that in 20 years or so, you will begin to receive only half what you grandparents do today.

A couple that is earning about $65,000 each for a combined $130,000 in family income at about 30, usually have a nest egg that's worth about $70,000. Typically, they will need to save 20% more to come by the same kind of retirement deal that everyone has come to expect today. Of course, if your Social Security benefits are going to be cut, you will probably be given at least 25 years' notice on it. But the day will come, and that will be 10% less income in your pocket.