Threats To Retirement Security In 2011
The oldest members of the Baby Boom generation will start to reach normal retirement
age at the beginning of the year, with much to worry about because of the financial threats to retirement security in 2011. Reforms to Social Security are just some of the factors that can diminish the ability of the retiree to accumulate enough money for a comfortable and financially stable retirement.
Reforms to Social Security
Congressmen and President Barack Obama passed an impressive tax cut to the tune of $858 billion this December 2010. They will probably move against cutting the deficit at the onset of the New Year, with the allegedly ailing Social Security program a possible victim of the crossfire. Many of the plans Washington has issued to reduce the deficit include raising the normal retirement age and lowering adjustments to help lower-income individuals cope with the rising costs of living. They will have to consider the facts, and pick these out of the haystack before they move to reform Social Security.
One of the myths lawmakers and ordinary retirees need to re-think is the future lack of funds that will cause the non-delivery of expected benefits after two to three decades, which will theoretically occur because of the wave of senior Baby Boomers taking their retirement benefits. Some experts say that the monetary deficit of the program will only affect workers from Generation X and the generations to follow because of the deliberate $1.5 trillion surplus. This amount was intended to fund the retirements of said Boomers since the 80s, and as such, stand to run out and cause problems for the program around 2035.
Another prevailing idea that lawmakers need to consider is the raising of the normal retirement age for Social Security; one concept that many people are pushing for since the economic crisis is causing workers to postpone retirement. However, working longer or postponing retirement is a strategy that will only work for employees who will be able to benefit from the move. For blue-collar employees or manual laborers who earn relatively little, working longer is not always a good move. In addition, proposals that suggest placing these workers in line for disability benefits may turn out to be much more costly than simply retaining the rules surrounding normal retirement age.
Another probable misconception about Social Security and its impact on retirees is how soon it will affect these affected seniors, which is as soon as 2012. Also, the program is not an entitlement that will dampen the recovery of the economy where it works relatively well, and helps keep millions of low-income workers diminish the threats to retirement security in 2011, and at least thirty-five more years.
by: Katherine Smith
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