2. Social Security is an important component of
most Americans’ retirement plans, but it’s also a
collapsing program.
3. Social Security’s revenues fall short of its
spending on benefits, and it is expected to run
dry in or before 2036. That would slash benefits
by about 25%. But do you know that it is
possible to retire without Social Security and its
reduced benefits?
4. Retiring without Social Security may seem like a
stretch, but it’s less so than you might think.
That’s because Social Security is essentially a
lifetime income annuity. You pay into Social
Security for a certain period of time. Then Social
Security sends you a check every month until
you die. As such, Social Security could,
theoretically, be replaced by an annuity. So why
not consider buying an annuity to help protect
your retirement?
5. According to the Wall Street Journal, the
average retiree receives $14,000 a year from
Social Security. A similar income stream for an
annuity would cost a 66-year-old roughly
$250,000.
6. According to a survey by the Employee Benefits
Research Institute, many Americans don’t have
that kind of money to invest; the survey
reported that fewer than half of American
workers have saved $25,000, and only a third
has saved $50,000. If, however, you’ve been
saving and can afford an annuity, why not
consider it?
7. Keep in mind that Social Security offers some
benefits most annuities don’t. These include a
federal government guarantee and inflation
protection.
8. Don’t underestimate the importance of these
benefits: During the financial crisis, many
annuity holders were worried about what would
happen if their insurance carriers filed for
bankruptcy protection. Plus, even small
amounts of inflation will gradually eat away at
your purchasing power.
9. If you’re concerned about Social Security but are
unsure whether you can handle retirement
without it, why not contact your advisor for
advice on your retirement savings plan?
