IJCH - Inside JaiChai's Head
(Meaning: My Warped, Personal Opinions and Musings)
From the Author:
Salutations.
I am JaiChai.
And if I haven't had the pleasure of meeting you before, I'm delighted to make your acquaintance now.
I invite you to interact with everyone, learn, and have as much fun as possible!
For my returning online friends, "It's always great to see you again!"
Background: Social Security - A Brief History
Signed into law in 1935, the U.S. Social Security program was designed at one time to be a key provider of income for Americans who reached retirement age.
However, with an aging population, increasing lifespans and the failure of many private pension systems, Social Security is a growing part of the federal budget, accounting for a significant slice of federal spending.
Even with the tremendous outlay into the fund, Social Security is not enough to fully fund retirement – the average Social Security retirement benefit is just over $1,231.
That does not cover the typical monthly expenses for many American households.
In addition, the government in 2016 ended the popular file-and-suspend rule that allowed many Americans to boost their Social Security payments by several hundred dollars a month.
Above excerpted from: https://money.usnews.com/investing/investing-101/articles/2018-07-19/how-to-invest-in-your-40s
Social Security forced to use emergency funds; calculated to run out of money by 2034. Will continue, BUT with only 3/4 benefits (Can you say "BREACH" or "Broken Promises"?) -
In 2018, Social Security was forced to delve into their emergency fund.
Before that, the last time it happened was in 1982 (36 years ago).
But in 2018, Social Security’s bleak outlook was actually spelled out. The program’s trustees state that the money, given current and projected outlays, will run out in 16 years!
Many, including myself, believe it was founded on a basically flawed premise; that is, taxing current workers to pay retirees.
Nevertheless, It was prosyletized as a "fair system" where young workers pay in and get it back when they're old.
BUT, what happens when the pool of young workers cannot sustain the benefits of the ever-increasing retiree population?
The ratio of workers to retirees has decreased from 3.3-to-1 in 2007 to 2.8-to-1 in 2017 and the trend doesn't seem to be slowing down.
Apparently, no one predicted the growth of the retiree population (advancements in healthcare - extending longevity), the rise in the cost of basic necessities, rent, and yes, even healthcare to impact both the governmental and private citizen's budget so significantly.
Compounding the problem is the rash of recent tax cuts; resulting in less money towards existing programs, effectivley pushing the retirement fund’s demise date a year earlier (BTW, Medicare’s will now die 3 years earlier).
In 2034, the trustees state that benefits will not vanish altogether. They will be dispensed at ¾ of the present amounts (up to the 2029 level).
Bottom line? -
If you are 46 and planning on taking the early Social Security in 2034 at age 62 - which is already at a negative pro-rated amount from the full benefits at age 65; or wait until you are 65 (>=2036), all benefits will only be 75%.
In other words, the government is not owning up to its promises - again - and those retiring 2034 or later WILL NOT GET WHAT THEY PAID IN!
Workers should worry less about social security and more about what they are or are not putting away for retirement.
WTF?
Here's a couple of articles with more details on this issue:
"Opinion: New warnings about cuts to Social Security and Medicare are a reason to worry"
You’ve spent a lifetime paying into Social Security, but there’s no guarantee that you’ll get out of it what you’ve put in.
And...
"A Social Security Surprise Awaits 49% of Millennials and 30% of Gen Xers"
The statistics don't lie: Seniors very much lean on Social Security to make ends meet during retirement.
The Trustees have forecast the complete exhaustion of Social Security's $2.9 trillion in asset reserves by 2034. That's just 16 years from now.
I have been extremely fortunate to have had a father who taught me NOT to rely on the government for my own survival (financially or otherwise).
At an early age, I prepared for future retirement.
And as luck would have it, while I was in the military, my personal investments were successful.
I never thought I would stay in the military long enough to qualify for lifetime retirement benefits.
But I did.
I retired at just over 40 years old with a full pension, annuities from previous investments, a up/down portfolio, and several ongoing concerns that arose over the years from my collection of eclectic interests and a small group of like-minded, very eccentric friends.
Most of my local friends aren't so lucky.
In spite of the fact that the cost of living in rural Asia is far less than most of the United States, I see firsthand on a daily basis, fellow American ex-pats struggling on just their monthly Social Security checks.
I can't imagine these people going back to the States and re-joining the workforce. Most do not have the technical skills for online, remote outsourcing employment.
I do all that I can to encourage and educate, but it's been futile - so far.
And I truly wonder how my current friends AND the future wave of retirees will be able to survive?
(I still have 6 1/2 years before I qualify for early Social Security benefits - if it's still around...)
By JaiChai
Mighty Kind of You for stopping by.
Truly hope to see you again!
About the Author
Believing that school was too boring, he dropped out of High School early; only to earn an AA, BS and MBA in less than 4 years much later in life – while working full-time as a Navy/Marine Corps Medic.
In spite of a fear of heights and deep water, he performed high altitude, free-fall parachute jumps and hazardous diving ops in deep, open ocean water.
After 24 years of active duty, he retired in Asia.
Since then, he's been a full-time, single papa and actively pursuing his varied passions (Writing, Disruptive Technology, Computer Science and Cryptocurrency - plus more hobbies too boring or bizarre for most folk).
He lives on an island paradise with his teenage daughter, longtime girlfriend and three dogs.