Admittedly, no one has the definitive answer to that question. This week I was made aware of a lady who recently retired at age 85. This is not a misprint, she just retired at age 85 and was expressing the fear that she would not be able to exist on the amount of Social Security she had started receiving each month.
In February 2009 a Californian, Ian Thiermann, age 90, was forced to go back to work 30 years after his initial retirement. Earning $10 per hour, Ian went to work in a Ben Lomond, California supermarket after losing his life savings ($700,000) in the Bernie Madoff Ponzi scheme.
August 2010 finds many Americans living in extreme economic uncertainty. Many are put in the unenviable position to have to choose whether to pay their rent, pay for their medications, or buy food to eat. However, our country is in debt up to its eyeballs. Two weeks ago the House of Representatives returned to a special called session to spend $26 billion of borrowed money on what was called a “Jobs Bill.” Critics pointed out that the vast majority of funding that was intended to be used to hire new teachers and save the jobs of others (approximately $10 billion,) would in reality be used to shore up union teacher retirement accounts.
Meanwhile, an increasing number of seniors find themselves having to work far beyond their anticipated retirement years. Experience Works, a nonprofit provider of community service training and employment opportunities for older workers conducted a study released in September 2009 that covered 30 states and Puerto Rico. Their survey found that many workers in their 60s, 70s and beyond are desperate to find work so they can keep a roof over their heads and food on the table. According to the study, many of the participants had no intention of working past their 60th birthday, but had to change plans after being laid off or following the death of a spouse. Some 90% of respondents 76 years and older planned to continue working for the next five years or well past their 80th birthday.
From its inception, christianretirement.com has advocated the position that every citizen should have their own independent sources of retirement income in addition to what they may eventually receive from Social Security. At no time has this argument revealed such an immediate threat as is being considered by the 18-member National Commission on Fiscal Responsibility and Reform.
The commission just announced that it is considering several recommendations that could drastically alter the future landscape of Social Security. Changes being considered for recommendation include but are not limited to the following:
· Raising the age at which participants may participate in full retirement (it is set to increase to age 67 in 2027, and some have suggest raising it to as high as age 70)
· Reduction of the rate at which benefits grow each year
· Reduction of COLAs…Cost of Living Adjustments
· Reduction of benefits for wealthier retirees
· Increasing the amount of income subject to Social Security tax
· Raising the Social Security payroll tax from its current level of 6.2%, or a combined total of 12.4% paid by both employee and employer
· Raising the Self employment tax from its current level of 15.3%
· Plus a host of other ideas to be considered
The commission includes 12 members of Congress, six Democrats and six Republican, plus four non-lawmakers chosen by President Obama and his appointed co-chairmen, Democrat Erskine Bowles, a former White House chief of staff, and Alan Simpson, a retired GOP senator. The group is charged with issuing its report no later than December 1, 2010, approximately one month after the mid-term elections.
When one considers the dismal state of today’s economy, one realizes that Social Security may not be as secure as many once thought. When instituted in the 1930s no one ever dreamed that Social Security would ever have grown to the size it is in 2010. No one could envision that it would ever spend more than it received or that it would one day face possible dissolution or bankruptcy. In their wildest dreams no one could have imagined that the United States Congress would raid Social Security's coffers of $2.5 trillion over the past 20-30 years only to spent the monies on pet projects and then replace the $2.5 trillion they spent with IOUs that can be found in a filing cabinet in Parkersburg, West Virginia.
Back to the original question: How Secure is Social Security? No one knows for certain because there are too many variables involved. The more germane question might be “What are my options?” If your name is Ian, are 90, have a job, and need more money you will probably need to continue working. If you are an 85 year old woman who just retired but are worrying about making it on your monthly Social Security check you may have to go back to work or depend upon family, friends, and fellow church members to help meet your daily needs. If you are 65 you may need to curtail spending and save every dime you can possibly save. If you are 45 you should not expect to recognize the Social Security program of 2030 or 2035. Forego buying that new car, that larger house, sending the kids to an expensive university, and begin pouring as much cash as you possibly can into Roth IRAs (nontaxable at the date of this writing,) silver, gold, land, quality real estate, or other valuable and proven commodities.
Due to current economic conditions and the fallout of recession some economists are warning people to be prepared for a lost decade, 2010-2020. While no one has a definitive answer for that possibility, many quietly express the fears that the “Lost Decade” may be more of a reality than they care to admit.
The best financial advice christianretirement.com can muster is to advise you to save all you can, spend as little as possible, get out of debt, and make your own arrangements for your financial future. If Social Security is ultimately rescued and one day proves to be a great retirement plan, rejoice, you will be that much farther ahead of the vast majority of Americans who stood on the sidelines and watched the game as spectators while you were on the playing field having the time of your life. They will envy you.
The very best advice we can offer for Christians is: don’t worry about Social Security, 401(k) s, Roth IRAs, and retirement. While it IS wise to prepare for retirement we still need to realize that it is only retirement. We have something far greater ahead. Remember, “This world is not my home I’m just a passing through.” Our real home is with Jesus and it awaits us in the not so distant future. Don’t worry; the Lord will work everything out for those who trust him. He reminds us: “Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God.” Philippians 4:6