End of the Road

The 2017 report from the Social Security and Medicare trustees was released a few days ago. The good news is that payouts in 2018 will see their first significant bump in years, 2.2%. Bad news is that the impending insolvency of these programs is still looming on the horizon. Ironically, 100 years after the program began it could face the issue of not being able to fulfill it debts to the public.

The disability side will be insolvent by 2028 and the fund for seniors will have a few years but in 2034 it will face the same fate, just 99 years after the program began. You’ve probably heard these stats before because they’ve been drifting around for years now. Many ideas have been thrown around on how to fix the program but most have been only temporary solutions. At the end of the day, our politicians have done very little or nothing at all to sure up the programs balance sheets.

Ironically this article isn’t intended to be a negative piece. I simply want to point out that the government will eventually have to make some hard decisions. This can can’t be kicked down the road forever. What you can do right now is create your own retirement plan. Don’t for a second rely on or think the government will or even can take care of you and your family. The best person to provide for you and your family is you.

It can start with simple steps like taking advantage of an employer match if you haven’t been already. Leaving some money to compound and build in your HSA account instead of using all of the funds each year. Opening up a Roth IRA and setting up automatic contributions. There are so many things you can do right now that will make the problems facing Social Security not a problem for you and your family.

One of my favorite sites is Portfolio Visualizer. There are all sorts of neat calculators that you can use to back test a portfolio. To see what would have happened if you invested in certain asset classes or funds up until today. If in 1972 at the age of 22 you began investing in the markets by contributing a $100 a month each and every year. These funds were placed into a broad US stock market index. When you finally retired this year at age 67 you would have about $2.3m in your account. Sure there are a lot of assumptions with this calculation, the biggest being the fact that $100 in 1972 was a massive amount of money compared to today but I hope the point is a clear

Saving for you own retirement is possible, you can do this. There is no better time to start than today. The sooner you get compounding working on your side the easier the road ahead will be.

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