Baby Boomer Retirements and the Insolvency of the United States Government.
By Anonymous
There are frightening statistics out there concerning the upcoming wave of baby boomers entering retirement with no savings and expecting Social Security to carry them through their golden years. Unfortunately with current policies in place a Social Security and Medicare system will be unable to cover the costs of over 75 million boomers entering the system and doubling the current number of retirees in the system.
Some sobering statistics about the current state of Social Security and Medicare:
Currently Social Security and Medicare payments take-up more than 2/5 of the federal budget. What if put in perspective is more than twice as much as government outlays for defense spending.
Around the year 2030 these programs will eat up as much as three quarters of the total budget of the United States of America. To pay for this, tax increases could total up to 50% or there will have to be drastic cuts in programs such as defense and other social spending. Another option would be for the government to have budget deficits increase to almost 4 times of today's levels.
As you can plainly see that there is no good scenario coming out of this anytime soon. Our children who will be paying for this largess will simply not take it since it's going to take up a huge percentage of their income. I would expect something on the lines of the Boston tea party and there will be a tax revolt because no one will want to live under such an onerous tax system.
If you have read this far and still can't see the writing on the wall let me be clear -- your benefits will more than likely be cut. You can expect that the eligibility age will increase. This has already started to happen with the age slowly working its way up to 70 years to receive full benefits. Another option for the government is to limit the amount of benefits based on income and wealth.
Many politicians who have tried to address this issue has been squelched bipartisan backbiting and bickering which has caused the candy be kicked further and further down the road making this crisis much greater than ever needed to be.
Politics aside what steps do you need to take to ensure that you will have enough income to live out your retirement years? If you have a pension good for you you're one of the lucky few in this country who still enjoy this benefit. Take the time to figure out what your benefit will be to see if it will be enough to cover your estimated costs during your retirement.
For boomers whose companies offer a 401(k) or 403b, make sure you are contributing the maximum amount. You'll not only save money for retirement but will realize a tax advantage on your current income. For everyone else make sure you are contributing to an IRA. Even if you're not eligible for the tax deduction make sure you are putting away as much as you possibly can.
For anybody who expects retire which I'm sure means all of us please please please do not rely on the government for your retirement income. As I've laid out in this article there are serious issues on the horizon that I feel are well beyond any point of fixing without causing drastic problems to baby boomers in their retirement years.
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