Social Security won't be around like it was for previous generations. What are Americans who have yet to retire doing about? Yahoo! News asked readers to share their strategies. Here's one.
FIRST PERSON | A recent analysis by the Associated Press revealed the sad truth about our Social Security system: If you retired today, you would receive less in Social Security benefits than you paid out in Social Security taxes. I am a 33-year-old attorney living in Royal Oak, Mich., a suburb of Detroit. Since beginning my career, and when planning for retirement, I have taken into consideration the fact that Social Security will be of little help after my career wraps up.
Working as an attorney, I earn a decent wage. I have a 401(k) with my employer and I also have an IRA that I fund on my own. These methods of efficient saving will be my lifeblood once I retire considering the predicted lack of Social Security funds. However, for me, retirement may be pushed off significantly compared to previous generations. Unfortunately for myself, and many of my peers, obtaining an education cost considerably more for us than what it cost these previous generations. And for many of us, these high costs were paid with student loans.
Now, instead of diverting disposable income into the above-mentioned savings plans, these extra funds go to paying down the student loans that were necessary to earn the disposable income in the first place. Add the lack of an ability to save to the lack of security from Social Security, and you have a generation of educated professionals that will be forced to work far into what used to be considered "retirement age."
Only time will tell if my children's generation will find themselves in a similar predicament. I hope not. Instead, and the rumblings can already be heard, higher education costs will likely be reeled in. In fact, since 1981, the cost of an education has increased six-fold while, at the same time, consumer prices increased just two-and-one-half times. Also likely is some sort of reform to the Social Security system. After all, what's the point of a Social Security system that provides no security?