Retirement Nightmare Ahead? The Coming Social Security Crisis: 7 Critical Things You Should Know and What You Can Do Now to Protect Yourself [Audio Explanation/Interview Below]

Craig Huey Economics, Government, Congress, and Politics, Taxation 3 Comments

Those who will be retiring in the next 10-15 years – or those already in retirement – are faced with some troubling realities.

So as Americans retire, and those in retirement will tell you, living without income can be disturbing.

Here are 7 things you should know:

1. First, one in four of those under 65 doesn’t have retirement savings and will have to rely on Social Security alone.

And those who have saved money and invested have not saved enough. Those between 55 and 64 on average have about $120,000 in their IRA, 401k or savings.

What that means is if they live for about 15 years more, they will have to be able to live on $1,000 a month, or $12,000 per year – plus Social Security.

Those who are getting a pension from their company or are living off their investments and savings are also going to be plagued with rising taxes.

Those living on Social Security receive about $18,000/year or $1,500/month. That’s hardly enough to live on.

If you are doing it, or if you know someone who is, it’s not easy.

If you add Social Security, plus the $120,000 that’s the average amount people have saved, that means you’ll be getting about $30,000 per year or $2,500 per month.

Better, but still very difficult.

That’s a lot different than the government – federal employees.

The bureaucrats get much more.

Right now, there are about 3 million bureaucrats. They get not 18,000 per year…but $40,000 per year or $5,000 per month.

The politicians, who could possibly fix the Social Security crisis, stop inflation, taxes and other things that rob people of security in retirement, don’t have much of an incentive.

If you have been in Congress when you retire, you’re going to make about $139,200 per year or $12,000 per month.

Those 60 and over, some 13% have no retirement savings:

  • 45-59: 17% saved
  • 30-44: 26% saved
  • 18-29: 42%. saved

In other words, whatever your age, it’s not good.

It’s estimated that most people need about 80% of their current salary in order to live in retirement.

2. Federal Government policies are creating economic realities that could devastate a person’s retirement.

If a federal, state, or local policy harms business through regulation, you’ll see higher costs, less choice, and economic consequences impacting your neighborhood.

3. The #2 Government Danger: Higher Taxes

Across the United States, many states are talking about an increase in taxes.

If you’re in Texas, Florida, Tennessee, and a few other states, you don’t have to worry about it.

But in other states, you do.

Income tax is going up.

In California, the higher tax rate could be as high as 16%.

And so are sales taxes going up.

Again, in California, the average sales tax between local, county and state taxes hovers between 10 – 12%, depending on where you’re making a purchase.

And it keeps going up.

And one of the most insidious taxes, that could rob a person of their home, is the increase in property taxes.

States like Tennessee, where property taxes are a fraction of what they are in a state like California, make all the difference between those retiring and those not.

So one of the things people should consider is that if they are in a high-tax state, move to a low-tax state for their financial survival.

4. The #1 Federal Government Danger: Inflation

Inflation.

Inflation is a combination of the debt and overspending by Congress, and the dramatic increase in the money supply caused by the Federal Reserve triggered by the overspending.

We are now in a period of historic money creation and historic trillion-dollar deficits. The result of this will be rising prices.

Anybody who has been to a store has seen the rising prices.

Anybody who’s a business owner knows all their costs are going to go up. 

We could be seeing this year, the value of everything going down by 4-6% due to inflation.

Inflation could go up like it did in the late ‘70s – around 10-12%. That means every month, prices will be going up.

If you’re on fixed income, this is not sustainable.

But this is the future, based on the politicians and monetary policy.

But there are solutions.

5. What is your personal solution?

Personal solutions are:

  1. Move to a lower tax state
  2. Pay off your home if you can and pay off your car if you can. That way you don’t have to worry about those costs.
  3. Invest. Invest directly in the market with a 401K or IRA.

Even if you’ve never invested before, you can do so.

If you’re still working, automatically taking money out for a 401K or IRA, or your own investment program is absolutely necessary.

Whether you’re taking out $100, $200, or $500 or more….it is transformational as to what can happen.

How can you invest?

6. How investing works…every reader can do it.

There are two ways you can invest:

  1. Understand that the earlier you start investing, the more money you will have at retirement.

It’s never too late. But it’s much better to start early.

The more years you invest, the more you end up with.

For example, if you’re 27, and you retire at 67 (which is the Social Security age for retirement) and you invested $100/month for 40 years, you’d have around $240,000 at 7% appreciation.

Next…but it would be probably closer to 9 or 10%, which is the market stock market average, which would give you more like $300,000-$400,000 in your account.

Social Security yields to the Social Security fund of 2.85%.

But the stock market average is 9.5%.

This higher interest is dramatically able to help you survive without worry and fear in retirement.

7. Social Security may not exist in the next 10 years…But if it does, it won’t be enough.

Social Security may not be around. In 2034, Social Security runs out of money.

That’s right. It completely runs out of money.

That’s only 13 years away.

It will be made bankrupt.

They either have to cut the benefits or dramatically increase the taxes.

That’s why it’s so critical that we privatize Social Security – so that if you want to invest, you have the freedom to take the money that you’re putting into Social Security and put it into the stock market.

There are ways to create a safety net to protect people from stock market losses.

But this is something that people should voluntarily be able to do and reap the reward of the higher return on the investment.

Plus, it would help save Social Security for everyone.

If nothing is done with Social Security between 2034 -2092…in the next 50 years we will see a $13.2 trillion shortfall.

64 million people are receiving Social Security today.

That’s going up as the aging population continues and people live longer… and sadly are outliving their saved money.

8. Discover how to invest no matter what your age.

Here are two things to know:

  1. You should get an investment newsletter. There are many good ones. If you’re interested, I can send you my recommendations of a few newsletter writers that are really good that I think you can trust. One is Dr. Mark Skousen’s Forecasts & Strategies.
  2. At FreedomFest, whether you’ve never invested before, or if you’re a veteran investor – you’ll find America’s top investment newsletter writers and economists talking about the economy and investing.

You’ll be able to see what they’re saying about gold and crypto, about stocks and bonds…what they’re saying would be the best way to be able to grow your income.

What I like about it is it’s about the only conference you’re going to find where many of the investment newsletter writers will make recommendations based upon a worldview that recognizes the problems in Washington and how to protect yourself.

They recognize how you can protect yourself from their bad policies, their deficit spending, and the coming inflation.

What do you think? Let me know at [email protected].

Comments 3

  1. Dear Craig Huey,
    For insights.
    Yes, we must be prepared. In Genesis Joseph, was blessed by God and given in sight on how to prepare for famine. A seven year drought.
    His wisdom gave Egypt and the world supplies of grain to get through the lean years.
    Thank you for this article I will share with others.
    I have a grandson who is interested in saving and investing. What tool should I give a 19 year old to start?
    Thank you
    God Bless
    Fervent in prayer
    Gloria Hall

  2. Hi Craig; I am 68 yrs old, and due to some unforeseen events, a bad car accident, etc, I have no retirement other than Social Security.

    I am finally able again to start saving a little per month, and wondered what recommendations you might have.

    Thank you for all that you do to help I so many ways. Blessings on you and yours.

  3. Thank very much Craig.
    God bless you for making us aware of the situation.
    A nd yes I would like to see the recommendations on how to invest.
    Sincerely
    Lucio

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