Health & Fitness
Retirement Planning in the New Normal
Social Security benefits are about to change. AARP has revised it's position stating that a change in benefit amounts by retiree's is immanent.
Fridays WSJ reports another signal that retirement planning is increasingly up to the individual.
AARP, the powerful lobbying group for older Americans, is dropping its longstanding opposition to cutting Social Security benefits, a move that could rock Washington’s debate over how to revamp the nation’s entitlement programs.
Why the change? Apparently, reality is finally beginning to sink in.
Find out what's happening in Minnetonkafor free with the latest updates from Patch.
Social Security, which was created in 1935, is facing a demographic challenge as the baby-boom generation retires with fewer younger workers to support it. The program’s actuaries say that by 2036, the program will have exhausted its reserves and will only be able to pay 77% of promised benefits. Between now and 2036, the government, which has spent the money held in reserve, will have to borrow to meet those obligations.
I had to re-read the statement above to make sure that I understood (i.e. the program will have exhausted its reserves by 2036, yet there are no reserves now…). At any rate, the fact that even the AARP is coming around to the fact that Social Security cuts are on the way is significant.
Find out what's happening in Minnetonkafor free with the latest updates from Patch.
Couple this development with the several decade-long trend away from defined benefit plans (where the employer is responsible for the saving and investing decisions) to defined contribution plans (where the employee is responsible for the saving and investing decisions) and we have a situation where it should becoming increasingly apparent that building and managing sufficient wealth to provide a comfortable retirement is up to the individual and nobody else.
Patrick Williams
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