Outlive Social Security

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Outlive Social Security

Jul 24, 2012 | RETIREMENT

People have traditionally seen their Social Security benefits as their core retirement fund.  This has been a forced retirement fund and is the only retirement for many Americans.  For others, their IRA or 401k acts as a supplement to their Social Security.  

The higher your income, a proportionally smaller percentage of your income will be replaced by Social Security.  In addition, fiscal problems combined with an increasingly aging population and reduced US work force is putting tremendous strain on the Social Security trust fund.  While social security is a sacred trust that will probably never be eliminated, benefits will have to be reduced in the future.  The easiest way to do that is to increase the eligibility age for recipients and reduce the amounts of cost of living adjustments and other increases in payments.  Your long-term retirement planning should recognize that social security benefits will play an ever decreasing role in providing retirement income.  Maximizing 401k and IRA contributions every year is the first step to ensuring a financially secure retirement.

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