Relying_on_Social_Security_Equals_Disaster

Relying on Social Security Equals Disaster Mary Ferino COM / 172 August 22, 2011 Michael Cummings Jr. Com172 Relying on Social Security Equals Disaster Mary Ferino Thesis statement: Americans should not rely on Social Security. Many Americans rely on Social Security benefits when it comes time to retire. Despite the common knowledge that Social Security and company pensions may not be available for Americans when they approach retirement age, many still plan to rely on Social Security as significant source of income when planning for retirement. All professional working Americans should not solely rely on Social Security benefits for retirement income. This paper will inform Americans on how important it is to plan a retirement; and this paper contains a variety of information on the different retirement options available to Americans when planning a successful retirement. If Social Security benefits are available when one retires, the benefit amount would be less than one would have made in their working days, making money tight and raising the poverty levels in the elderly community. There have been many positive accomplishments Social Security has had on the retirement community. According to congressman, XavierBecerran. (2011), “Thanks to Social Security and the improvements made to it over the years, “the poverty rate for elderly Americans has dropped to 10%. Paying average monthly retirement inflation protected benefit of $1,164 Social Security serves as a modest, yet solid guard against poverty for most retired Americans” without any other retirement plans, but these funds are not guaranteed. It is not wise for Americans to rely exclusively on Social Security. The vision of Americans acquiring Social Security is a dignified alternative option, but when it comes time to plan for retirement, Americans should not solely depend on the Social Security Benefits, Social Security benefits are a care package the government came up with to help prevent poverty within the elderly community. There are and have been ongoing threats of Social Security cuts and other major issues making Social Security benefits unreliable. Seeking other options while planning a retirement is not only smart, but it is also very crucial to one’s future well-being. There are numerous reliable choices to consider when it comes to planning retirement. It would not be smart to rely on Social Security benefits that might not be available when working days are over. Working an entire life and not planning other retirement plans other than relying on Social Security could leave one homeless with no money. Making smart choices post-retirement, such as investing in a 401K programs, stocks, bonds, and real estate, are some of the more popular choices Americans seek before retirement. Saving for retirement is a smart idea for those who want to reap the rewards from their hard work during their work-free days. Individuals should weigh their retirement options and choose the plan that will pay out the best when the time comes to retire. Here is a breakdown of popular retirement plans. (found by Global ira, 2010.) * “401K – This type of investment is one of the easier options to choose because many employers offer 401Ks as an incentive for retiring from their company. In addition, most employers match the funds that accumulate in an employee’s 401K. The level of matching that a company does, typically increases throughout the years Therefore, the more time spent at a certain job, the more of a percentage the company will match on an employee’s 401K. In addition, individuals over 49 have the opportunity to make “catch-up” contributions to their 401K, as well. It is also important to monitor the IRAs performance of a company-sponsored 401K to determine the next investment step * An IRA can be a great option that works well with a 401K by depositing contributions from the 401K into the Traditional or Roth IRA. One idea for choosing an IRA is to choose an option that does not penalize for withdraw. IRAs are for saving money — and not withdrawing. Sometimes it is necessary to withdraw funds from an IRA, which is why it a good idea to choose a penalty free option, such as a Roth IRA. In addition, the funds in an IRA are not taxed until the money is distributed. * Mutual Funds – Diversifying mutual funds is another option that helps individuals save for retirement.  It is a good idea to invest in a standard index fund first and find other markets and options to invest in, It is also smart to shop around for the right mutual fund that meets personal needs and goals as well as an option that provides the right return. * Stock Market – Stock market investments are dependent on how the market is performing and therefore it is important to hire a good stockbroker when investing in stocks for retirement. While investing money into stocks can be a risky investment, for smart investors it can also lead to high return. Buchanan (2010), “It has been reported in recent articles that the Social Security fund will be dissipated by the year of 2037. This year’s Social Security will already be $45 billion dollars in debt.” (Social Security Scare-Mongering and Trust between Generations: There is No Crisis, Either Short-Term or Long-Term, para.10) The US government is handling the debt by “quantitative easing,” which is a euphemism for printing more money. The new money that will be paid out to retirees will immediately be spent on their living expenses; this printed money will directly show up as rising prices in the marketplace. This means that every dollar that is spent by these retired individuals will directly decrease the spending power of every other dollar in existence, which shows up in the market as rising prices. The money that retirees have to pay to meet their living expenses will continue to rise, but their entitlements will always be lagging behind financially. The cost of living increase is based on the government’s inflation numbers. The inflation numbers are stated to always be below the true rate of inflation. This inflation will eventually catch up to the retirees that rely only on Social Security benefits. It will be then when retired baby boomers may finally understand the prophetic words of Thomas Jefferson who warned “If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent fathers conquered.” -Thomas Jefferson There is no common sense in the statement “every American should rely on Social Security when it comes time to retire”. What makes sense in these economic times are for Americans to plan ahead for their retirement. Americans should take plenty of time to research retirement options, and choose the retirement plan that will pay out the most. Working Americans should not limit themselves to just one option, but to be aware and educated of all the retirement opportunities available to them. Arranging a successful retirement and researching all options available will provide a secure future when one’s working days are over. References 1. Retirees who are relying on Social Security are totally screwed. (2011 February).  The New Survivalist.Retrieved from http://survivalist.wordpress.com/2011/02/02 2. Congressman Xavier Becerran.. (2011). Social Security. Retrieved from http://becerra.house.gov/index.php'Itemid=27&id=469&option=com_content&view=article 3. Buchanan, N. h. (2010). find law. The law offices of Wallace$Graham. Retrieved from http://writ.news.findlaw.com/buchanan/20100401.html 4. glabal ira. (2010). global ira paperwork services. Retrieved from http://www.globalira.org/smart-retirement-options