Every two weeks, millions of hardworking Americans are reminded that they are paying into an unfair government subsidy that they will supposedly benefit from when they retire. The reality is that the current state of the Social Security system is complex and uncertain, and may be an unwise choice for retirement funding.
In this piece, we'll look at some of the problems associated with Social Security and propose better ways you can use to invest for your future.
According to a 2010 Congressional report on the viability of the program entitled "Social Security Reform: Current Issues and Legislation," the capability of Social Security to pay out 100 percent of owed benefits per year will cease in 2037. Compounding the financial situation is an issue of demographics. By 2030 there will be 76 percent more retirees than there are today.
What impact will this have on the year-to-year operations of Social Security? During 2011, the program's operating budget ended up with a 4 percent deficit. This means that the American government had to borrow additional funds to maintain the initiative. The 2010 report predicted that this trend will cease in 2013, but starting again in 2015 the deficit could become an annual problem. Additionally, the rate at which the program becomes insolvent is expected to hasten, with the declines in both cash revenues and overall deficits converging and accelerating around 2025.
If the above situation described a private institution, it would be bankrupt far sooner than expected. Government support will continue to keep it afloat but it will rely more and more each year on foreign borrowing. However, there is no way of knowing how long the subsidization of this entitlement will last in its current form, a structure that some would argue resembles nothing more than a modern-day Ponzi scheme.
If you are laying the groundwork for your retirement now, you should consider viable options that don't rely on monthly checks from the government. Cash flow real estate enables you to receive income from stable rental properties that produce results fast. Visit GreatWealthStrategies.com today and receive a "Free Game Plan Report" to see how this quality asset protection method can benefit you.