Saturday, May 12, 2007

Shrinking Social Security

A new report says Social Security will replace less of your income than it did before, thanks to taxes, Medicare and the reality of hitting your 60's.

Social Security has been getting to a point that many of us who are under 40 will never see any of the money we put into it. This article talks about what the equivelant social security paycheck will be in the future compared to what it is now.

Since few of us actually like to save, here's some incentive: a new study says Social Security will replace much less of your pre-retirement income than it has for retirees in the past.

To give you an idea of what that means to your wallet, consider a 65-year-old average earner making, say, $36,000 the day he retires. He might get about $14,000 in Social Security benefits after paying his Medicare premiums today. But if it were 2030, that same earner would pocket closer to the equivalent of $10,000. And the more you earn, the greater the difference would be.

Anyone who at least thinks about their retirement, hopefully isn't relying on social security to live on at that point. We aren't going to get much, if anything by that time even though we paid in so much. We are paying for the people that weren't educated about retirement investing in the past, and need this money now, but we hav emuch more information available to us now so that we can make better plans. Investing in any number of things like network cables, computers, oil, etc. is a better option than waiting for social security to pay us when it doesn't even keep up with inflation.

For a more in depth look at this story look here.