3 Brutal Truths About Social Security Boomers Must Understand
Written by
T. Woods
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Retirement planning is serious business — proper and responsible planning can be the difference between ensuring that your golden years are safe and comfortable, or fraught and financially disastrous. A crucial component to that retirement planning? Understanding Social Security.
That said, the generation currently entering into retirement age — baby boomers — may not have the grasp on the hard realities of Social Security that are needed for a responsible, well-planned retirement. In fact, there are a handful of mistakes and misnomers about Social Security that are easy for boomers to make, if they’re not careful.
These truths, while potentially frightening, even brutal, have to be understood for a stable retirement.
Social Security Will Not Be Enough
Quite simply, Social Security, while a safety net, cannot be considered a sole source of retirement income. It just isn’t enough; Social Security funds were designed to bolster retirement income, not be the only source of it. Boomers must plan for a primary retirement income other than Social Security.
Social Security Benefits Only Cover 40% Wages
Why should boomers not rely on Social Security only? Per The Motley Fool (via Nasdaq), at best Social Security funds will only cover approximately 40% of a retiring boomer’s pre-retirement income. That’s 60% of pre-retirement income that has to be found elsewhere, unless you’re prepared to lose more than half of one’s income, and live on the little that’s left.
Social Security Is Running Out of Money
As 24/7 WallStreet has reported, unless Congress takes significant action, it’s very possible that the Social Security Administration will run out of funding by 2035 — a time when a vast majority of boomers will be retired and living upon at least some level of Social Security.
Not only is Social Security not enough to serve as a sole retirement income, it may not even be solvent within a decade. A hard, brutal truth that all boomers must face is that, despite what they’ve put into Social Security, it cannot be relied upon to save, or even protect, their retirement.
The remedy for this? Savings, investments, responsible spending and a varied portfolio – and a healthy honestly about the sometimes brutal reality surrounding America’s Social Security system.
More From GOBankingRates
