If you're close to retirement, I’m sure you’ve already mapped out your financial plan with Social Security benefits in mind. But changes taking place right now are a big warning that you can't rely on entitlements like Social Security.
Hi, I'm Kathy Fettke and this is Real Estate News for Investors.
As part of the Bipartisan Budget Act of 2015, lawmakers closed several so-called "unintended loopholes" in the Social Security rules.
A Time article reported last year that trust funds for Social Security and Medicare could run out by 2034. One article in the Huffington Post said that retirees could see steep cuts "this year". The Heritage organization warns of insolvency by 2035.
So where does the money come from?
12.4% of a worker’s wage goes into the Social Security Trust Fund. Typically, an employee pays 6.2% and the employer pays the other 6.2%. Self-employed people pay the entire 12.4% amount. This deduction only applies to the first $90,000 worth of income. So people making six-digit salaries or more, only pay 12.4% on the first $90,000. That's it.
This money not only pays for retirement and spousal benefits, it also pays for disability insurance, veterans' benefits, unemployment insurance and food stamps.
Last year, the trust fund paid out $70 billion dollars more than it collected and the deficit is expected to grow until the trust fund is depleted, in the not too distant future. That's without any intervention strategies such as a tax increase on people with higher salaries or by cutting benefits and increasing the retirement age. Doing nothing will surely leave the program and it’s beneficiaries high and dry within a relatively short amount of time.
So what do we do to protect ourselves? You have to take your retirement into your own hands!
Consider hard assets that don't disappear overnight and generate passive income for life.
For the full transcript: www.NewsForInvestors.com
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