Workers have been warned for the past ten to fifteen years about this possibility but an article on Yahoo! ("Social Security and Medicare finances worsen', Martin Curtsinger, May 12, 2009) puts this possibility into concrete.
Time for a 401K Checkup
Obviously the recession has wreaked havoc with several workers' 401K retirement plans. Even if retirement seems a long way off it's still prudent to take action. Ignoring it won't make time stand still. Check the balance and see how much of a dropoff has taken place. Check to see if the company is still matching contributions and if not try to increase the money taken out from the paycheck.
The best advice would be to consult an independent financial adviser. They have been professionally trained to pick out sound investments that will enable most retirement plans this economic tsunami and can recommend several options.
Be Prepared For Higher Taxes Or Delayed Retirement
According to the Social Security Administration the official retirement age is sixty-six (66). However, many Americans vary their retirement age based on individual needs, desires and financial situation. One possibility that could ease the Social Security account is to raise the retirement age. While Curtsinger's article has not given an idea of what the age could be raised to, considering that most American are living longer it wouldn't be a surprise to see the age increase to 68 or possibly higher.
The other possibility is raising payroll taxes. Payroll tax actually funds the Social Security account. This would affect workers and employers alike since each entity pays 6.2% of their wages toward the account (www.irs.gov/pub/irs-pdf/p15.pdf). Considering the crunches both entities have suffered because of the recession an increase to this tax could result in further layoffs and economic strain.
A Future Without Social Security
Clearly the days of letting the government take care of the average American in their golden years are over. Most people born in the 1970s and afterward may not see themselves lying on a beach or playing shuffleboard with Helen and Morty Seinfeld in Del Boca Vista but must realize that can be them one day.
Former President George W. Bush had talked of privatizing Social Security to help boost the account but it seems President Obama has other ideas (www.ontheissues.org/2008/Barack_Obama_Social_Security.htm). Either way, the average American who is eighteen to forty needs to make sure their retirement funds are in place to last them adequately and see Social Security funds as a possible bonus, not a means for living.
Marc Daley - My first novel, Exiles On Front Street, will be published within a matter of weeks by Strategic Book Publishing. I am currently working on ...
