I often hear a comment from gen y's and x's that they don't count on getting social security benefits. I understand their doubts, but quickly add my opinion that social security will be available. And significantly, that it is likely to be an important element of their retirement income.
My point isn't that social security benefits won't change, there are a number of proposals being floated by both parties, rather that at this stage social security is a societal and cultural obligation the likes of which can not be easily changed.
When I model peoples retirement income, it is immediately evident that social security income is critically important for virtually everyone. Of course, there are those persons that have a large amount of wealth and naturally social security is insignificant for them. What is surprising is how much an impact social security income means for many of us that are considered wealthy. I use the words “critically important” to convey the importance of probability of success in retirement. Retirement projections are just that, a projection with an effort to determine the probability outcome (high, medium, low) that the income stream will sustain a certain level of consumption over the life times of the person(s). Take out social security income and the probability for maintaining most people life style drops precipitously.
I suspect that many people have never looked at a reasonable projection of their retirement life. Simple calculators don't provide a very accurate picture. A recent study highlighted the enormous disparity in outcomes when testing many of the online calculators. Its worth some effort to get a reasonable projection. You don't need to (and shouldn't) sign up for an expensive financial plan to arrive at this. I do this for a nominal flat fee.
My point isn't that social security benefits won't change, there are a number of proposals being floated by both parties, rather that at this stage social security is a societal and cultural obligation the likes of which can not be easily changed.
When I model peoples retirement income, it is immediately evident that social security income is critically important for virtually everyone. Of course, there are those persons that have a large amount of wealth and naturally social security is insignificant for them. What is surprising is how much an impact social security income means for many of us that are considered wealthy. I use the words “critically important” to convey the importance of probability of success in retirement. Retirement projections are just that, a projection with an effort to determine the probability outcome (high, medium, low) that the income stream will sustain a certain level of consumption over the life times of the person(s). Take out social security income and the probability for maintaining most people life style drops precipitously.
I suspect that many people have never looked at a reasonable projection of their retirement life. Simple calculators don't provide a very accurate picture. A recent study highlighted the enormous disparity in outcomes when testing many of the online calculators. Its worth some effort to get a reasonable projection. You don't need to (and shouldn't) sign up for an expensive financial plan to arrive at this. I do this for a nominal flat fee.
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