BY RUSSELL TURNER
STARTING TO FEEL THE HEAT
Over the past several days I have watched the volcanic eruptions in Hawaii; while the eruptions are a long way from Oklahoma, it allows us to see what happens when disaster happens. The lava flows from the volcano show us how absolutely helpless we are against the forces of nature. The residents have the hope that something will slow the lava and spare their homes and businesses. Sadly, for many people, all of the hope does little to prevent their property from being destroyed. The only true solution is prevention; the people who did their homework and checked the geology were the ones who fared the best. The wise people were the ones who searched for the most stable areas to build their homes and businesses. Sometimes it is hard to admit that many of us are only a short distance from destruction, but having a wiliness to look into the face of danger can prevent a lot of heartache.
We can see the danger in Hawaii on the evening news, but seldom do we see an even bigger disaster that is getting closer every day. Our nation is facing a huge problem with retirement and pension underfunding. Recently financial services giant Northwestern Mutual released a report showing that 1 in 3 Americans has less than $5,000 in retirement savings. The report also stated that 21% of Americans have absolutely nothing saved for retirement and 33% of Baby Boomers, the generation closest to retirement, have between $0 and $25,000 saved for retirement. The report shows why most retirees currently rely on Social Security to meet their monthly living expenses. A Gallup poll from last May reported that 58% of US retirees said that they rely on Social Security as their major source of income.
Social security was designed for the younger workers to pay into the system, then that money would be paid to the current retirees; the problem is since 2010 the program’s cost has exceeded its tax revenue. Last year this shortfall was $59 billion, 11% worse than in 2016. To make up the difference and cover this shortfall, Social Security has to dip into its trust fund, effectively burning through the program’s savings. It is the same concept as one of us having a savings account where we intended to live off of the interest of that account, but for any number of reasons the interest is not sufficient then we are forced to use the principle to get by. It is easy to see that in a period of time the principle will be gone and you will be left destitute.
Even the Board of Trustees of the Social Security Administration predicts that the trust will be depleted in 2034. Sixteen years may seem like a long time off, but it will be upon us before we know it. The Board of Trustees is telling us that once the cash is gone the program will have to, at a minimum; reduce the monthly benefit that’s paid to its recipients. As I said earlier a disturbing number of Americans has little to nothing set aside for retirement… and they’re expecting to be able to rely on Social Security. Just like the lava flows in Hawaii, the closer they come to you the more heat you will feel, likewise the closer we get to 2034 the heat will become unbearable for many Americans.
Comments
Post a Comment