First Person: I'm Ignoring Social Security in My Retirement Calculations

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Retirement calculations can be complicated, as it is hard to predict what will happen later in life. Even if life unfolds as predicted, there is always the unpredictability of investments such as stocks and mutual funds. Complicating retirement calculations is the issue of Social Security, which has been a part of American culture for decades. One of the benefits of studying history is that it reveals the fact that all programs had a beginning. In addition, some programs also have an end, which even includes those programs that seem like they might carry on forever. I will not complain if I receive a Social Security check when I retire, but right now I do not plan on the program still being intact when I stop working.

Funding issues

My belief does not stem from my political views in any way. I do not leave Social Security out of my calculations due to my opinion of past, present or future administrations. Rather, I just do not have great confidence that the Social Security program is sustainable over the long term from a financial standpoint. At some point it seems likely that the program could run out of money or need to be borrowed from by another pressing need. This also does not mean that I lack faith in the government. Instead, I see this as simply a way for me not to plan on financial resources that I may not be able to control.

Honoring those that came before

I can certainly understand where people would be upset if Social Security went away. After all, people pay into the fund throughout their adult life. It would be unfortunate to not see any return on that investment. I guess I am content with helping pay for the retirement of those who came before me. Perhaps this is a sentimental viewpoint as I think about my grandparents who worked hard their whole life but depend on Social Security checks. Maybe I will feel differently when I get older, but for now I am okay with the program phasing out in the future or experiencing a change in structure and investment options.

Who is going to make the call?

Granted, I will be curious to see what happens in the future. Recent changes to payroll tax have caused some to suggest that social security funding could be weakened. If the government were to decide at some point that Social Security was not sustainable, some bold leader would need to propose a major modification to the program. Obviously that would solicit a major amount of criticism, so it may be that such a decision will not happen for some time. Politicians are not fond of making unpopular proposals.

A conservative approach

I cannot predict the future. Social Security may be intact when I retire, and if it is, that will hopefully provide a supplement to my other retirement accounts. I don't fret about the future, but I also do not take it for granted. Nothing is certain, and even my retirement accounts could be at risk. Therefore, I like to take a more conservative approach and not assume that social security will fund my life when I retire.

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