Do you plan on living until 2031?
Although the date may sound like one out of a sci-fi movie, ten years isn’t that far off in reality.
Regardless, if you answered yes to this question, then there’s another hurdle to “look forward” to once we get there.
The near depletion of our Social Security Benefits.
The Committee for a Responsible Federal Budget, known as CRFB, recently revealed their analysis on the Congressional Budget Office or CBO’s publicized data.
“Based on CBO’s figures, Social Security’s retirement benefit would be cut by roughly one-quarter in 2031. In other words, today’s youngest retirees will face a sharp 25% drop in their benefits when they turn 73.”
The government shortly released a statement claiming that by 2035, Social Security would be unable to pay full benefits.
Unfortunately, the 24% cut in our federal benefits is not the only hurdle we have to face in our golden years.
Healthcare costs are swiftly rising. Fidelity estimates that a couple entering retirement in 2020 would need $295,000 to cover their healthcare costs in retirement.
In 2010, this number was around $250,000, an 18% increase in the last 11 years. And since last year alone, the amount has increased 3.5%.
Health care is, in fact, one of, if not the most significant, expense that retirees face. Some studies show that 15% of all retirement savings are spent on healthcare alone.
So what are the primary catalysts driving these numbers?
Fidelity points out the factors driving the increase in costs including longer life expectancy, high health costs for early retirees, and health care inflation that continues to outpace the rate of general inflation.
Isn’t living a longer, more prosperous life something that we should be rewarded for?
Health care costs traditionally have always been ahead of general inflation rates.
However, since inflation rates have been and are continuing to rise, healthcare rates are also estimated to grow.
One could say that the system is broken and has been for quite some time.
According to Fidelity Investments, more than 4 in 5 Americans have said the pandemic’s economic fallout affected their retirement plans.
A third estimated they will need at least two years to recover. Additionally, more than a third reported being more concerned about their ability to maintain a nest egg in retirement than before the pandemic.
The time to take control and put matters into our own hands has been long overdue.
Are you relying on a broken system to support what’s supposed to be the best years of your life?