The Myth of Social Security as Your Primary Retirement Income

Social Security as Your Primary Retirement Income

To keep it solvent, the Social Security Administration has already pushed back the age at which younger persons will be allowed to collect full benefits.

By: Douglas R. Andrew

When I ask people if they have any guaranteed source of retirement, they almost always answer, “Yes, Social Security.”

But is it smart to count on Social Security as your  primary source of retirement income? Is it possible that this national trust fund could be severely depleted? Consider the facts:

*  When Social Security was first enacted during the Great Depression, there were sixty workers to every one recipient of benefits. Within just a few years, that ratio was reduced to fifteen to one.
* By the 1970s, it declined to six to one. By the 1990s, there were three workers in America for every one recipient of benefits.
* Now, as the oldest Baby Boomers prepare to begin retiring (or to collect Social Security at 62, the earliest allowable age), it is estimated that before long there will be two workers in America pulling the Social Security wagon for every rider.
* To keep it solvent, the Social Security Administration has already pushed back the age at which younger persons will be allowed to collect full benefits. If you were born between 1943 and 1954, you will not be eligible for full benefits until you reach the age of 66. If you were born in 1960 or later, you will not be eligible for full benefits until you reach age 67.
* With the upcoming workforce decreasing and retirees living much longer than when Social Security was initiated, there will likely be even more Social Security reform.

Because of these factors, the reality is that Social Security benefits will likely be a small supplement to your retirement, not your primary source of income.  Even the Social Security Administration says so.

Copyright © 2007 Douglas R. Andrew

About the Author:

Douglas R. Andrew is the author of The Last Chance Millionaire: It’s Not Too Late to Become Wealthy

With clear language and a wealth of contrarian financial knowledge, this book is the definitive retirement guide for the baby boomer generation. So don’t settle for living off Social Security of your taxed-to-death 401(k) — read this book and enjoy your best years while securing your financial future for yourself and your loved ones.

Photo:  Walden63