The annual update from the Social Securities Trustees published at the end of May turned out to be better news than was expected. They have projected an emptying date of 2033 for the Trust Funds’ with some improvements in the Trustees’ projection methods that have offset worsening economic data and plan assumptions. You still have about 20 years for get ready for the Trust Funds depleting, which will cut benefits by a quarter. If you make some good investments and make up the difference in advance, a comfortable retirement is easily attainable.
By planning properly for your retirement through other channels like IRAs and Annuities in addition to your company-sponsored 401(k) program, you may not even notice the difference when the time comes. Social Security was never designed to set Americans up with a comfortable retirement, anyway. Even the Social Security Administration says, “Social Security was never meant to be the only source of income for people when they retire. Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisors say retirees will need 70 percent or more of pre-retirement earnings to live comfortably. To have a comfortable retirement, Americans need much more than just Social Security.”
Whether your plan for retirement is a pension, a 401(k) program, an IRA or a traditional brokerage account designated for retirement, you need to have a plan to cover the rest of your funding. Despite Social Security covering 40 of the 70 percent you will need for retirement, put yourself a little ahead of the game by expecting them to cover 30 percent, and you covering the 40 percent.
Source: Daily Finance