You’re probably aware that there are numerous issues surrounding the Social Security Trust Fund, and its ability to pay benefits into the future. Just this past April, the annual Social Security Trustees’ report pegs the trust fund to be depleted by 2035. There’s been a lot of talk about “fixes” for the system.
Social Security Trust Fund “Fixes”
Some of the talking points have been items like increasing the income limit on which Social Security tax applies. Increasing both the employee and employer contribution to FICA by one percentage point. Or increasing the full retirement age for anyone under 50 years old to 68 years old. And also increasing the earliest age of eligibility from 62 years old to 64 years old. Limiting the annual cost-of-living adjustment, or (COLA) for Social Security recipients to 90% of the calculated increase has also been discussed. With a few exceptions, at the end of the day, all it has been is talk.
It’s no secret that every year we kick the proverbial Social Security can down the road, the worse shape the program will be for current and future recipients. It’s also apparent that any fixes to the program will not be popular with certain segments of the voting population. And why we see a lot of inaction from our politicians on the issue. You might feel angry or helpless that you have no control over such an integral part of many retirement plans. To some degree you do have control, let me explain.
Think of retirement as one of the biggest road trips you have ever taken. More than likely, you’ll use GPS for a visual of the routes you’re going to take to get there. Even if you’ve already been on this trip, it’s still likely you’ll still have the GPS running in the background. It’s there to help you avoid the pitfalls and delays such as road construction, traffic jams, and closed roads. Now relate the road trip back to the importance of financial planning.
With a plan, we can find out what retirement’s going to cost you each year, what’s important to you, why it’s important and how important it is to you. Then we can look into the sources of income (most people this is going to be Social Security) and other outside assets. With the completed plan we can look at different timing strategies in how you and your spouse take your Social Security benefits and run different potential reductions in benefits on those strategies to help you make the best decision. Maybe it’s not even a blip on your retirement radar, maybe it’s bigger impact then realize. If it does negatively impact your plan, then it opens the discussion to tradeoffs and evaluating spending on some of those wants and wishes that may not be as of high importance for you.
Make a Plan
We may not like or feel good about the current state of the Social Security trust fund. So, do something about it for yourself. Have a plan, stress-test that plan, know your situation and options.
Our financial planners will review your plan, stress-test it, and report back potential risks and opportunities. If you’re interested in this process, feel free to give our office a call any time at 913-393-1000 or fill out the form below and we will be in contact to schedule a time with you.
Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.