Jaspreet Singh: Social Security Is Not Keeping Up With Inflation — Here’s What To Do About It
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Nicole Spector
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Daria Uhlig
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Jaspreet Singh, CEO of Briefs Media and the host of “The Minority Mindset Show” recently sat down with GOBankingRates’ Jamie Catmull to talk about retiring in the U.S. In their conversation, Catmull asked Singh, “What changes and plans should someone make if they plan to retire on only Social Security?”
As is the case with so many other finance experts when posed this question, Singh wasn’t terribly optimistic in response.
“Social Security will, unfortunately, not pay you enough money to live financially free in retirement,” Singh said. “If you are planning on living off of Social Security, I highly suggest you take drastic action to subsidize your Social Security income starting today.”
Singh noted that even when factoring in cost-of-living adjustments (COLA), which, in 2023, saw Social Security bump up benefits by 8.7%, the federal program simply won’t be able to adequately fund Americans in retirement given a higher cost of living, which continues to escalate. Over the year ended June 2023, consumer prices increased 3%; over the year ended in May 2023, costs were up 4%.
Rising costs isn’t the only hurdle Americans face. The Social Security program itself is on shaky ground. Currently, benefits are expected to be payable in full on a timely basis only until about 2035, when the trust fund reserves are projected to be depleted. At that point, Social Security will be funded by payroll taxes alone, which will only cover about 75% of scheduled benefits, according to the Social Security Administration.
Singh strongly suggests that people who are banking on Social Security overhaul their approach immediately and double down on generating more income.
“Take a second job, work to get a promotion, start a business/side hustle and/or cut back on expenses,” Singh urged. “Then, take this additional income and invest it into cash flow producing assets.”
What type of cash flowing assets? Singh didn’t speak to all options but did highlight dividend paying stocks, ETFs and index funds as well as rental real estate.
“This way, you can start creating a new income stream for yourself,” Singh said. “The initial learning curve will be tough, but if you do it correctly, it can pay you with cash flow for the rest of your life.”
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