Paradox of Social Security

For years many articles have been written about the potential future solvency of the Social Security Administration. Information can be obtained at www.socialsecurity.gov. In my opinion, this is one of the major issues facing our country and not much is being said in today's political arena. Hello, this is a major issue that faces every person who is currently retired and will be retiring, which is most of us.

The paradox is that the people who rely the most on Social Security benefits will be the most impacted by any action to address any potential future solvency issue. The people who need the benefits the most, people with the lowest income, will be impacted if benefits are reduced.

According to the Employee Benefit Research Institure, the average American retiree gets retirement money in the following mix: 40% from Social Security, 24% from earnings, 19% from pensions and annuities, 15% from assets like IRAs, and 2% from other sources. Retirees in the bottom fifth of income, those with less than &8,261 in 2006, have 88% of their money from Social Security. Retirees in the top fifth of income have 19% of their money from Social Security.

It is very scary if you have 88% of your future retirement money in Social Security and you read an article about future problems with solvency.

Bottom Line: Have a retirement plan that goes beyond Social Security benefits as the primary source of retirement money.