Special Report: Retirement Crisis of 2016

In a report to Congress about the health of the Social Security Trust Fund, it is revealed that, “Social Security’s Disability Insurance (DI) Trust Fund now faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided.”

A recent Forbes article published right before the new year revealed, “the 2015 Trustee’s Report estimates that the current Social Security system is not generating enough revenue to stay in balance past 2033.”

Another economist (who accurately predicted the market collapses of 1999 and 2007) publicly stated, “We could see the end of Social Security as soon as 2016, and there is nothing President Obama, Congress, or any other government agency can do to stop it.”

For individuals receiving Social Security Disability, expect a 20% cut at minimum in the next year.

When the fund is exhausted, which will likely occur in the next decade or so, the law requires all benefit payments to be cut by 25%.

72 million Americans will feel the impact of this.

By 2050, there will be almost 90 million retirement-age people living in the United States. If you will be one of them, then now is the time to get concerned about how to maintain a dignified lifestyle beyond retirement. 

How did conditions become so bad?

Let’s rewind back to 1950, when a single retiree’s Social Security benefits were supported by financial inputs from 16 U.S. workers. In addition, life expectancy was 65.6 years for males and 71.1 years for females. This created a surplus of Social Security funds — more financial resources were available than were being used. People weren’t living as long, either. This might sound morbid, but retirees just weren’t dipping into Social Security for as long as they are now.

sslinechartUnfortunately, the current situation is much different. According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States. However, as the inputs are decreasing, the burden of outputs is increasing. Men and women today can expect to live to 84 and 86 years old, respectively. According to the Social Security Administration, “those are just the averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.”

As the population continues to grow and live longer, the number of Americans drawing from the Social Security trust will also grow — an expected increase of 35 million by 2035.

The only way for the Social Security system to survive is for the fund to start earning robust interest. Unfortunately, the average rate of interest earned by the Social Security trust fund continues to drastically decline. There is little hope of change, as the Fed continues to keep interest rates so low.

So, what does this mean for the average American?

Basically, it's time to start planning your future as if Social Security does not exist

It will not be there for you when you need it. 

It's time to change your idea of what "retirement" means.

inforgraphicAs of 2011, HALF of working Americans were not offered a retirement account by their employer.

But here’s the really shocking part:

Currently, of those Americans who are offered a retirement account by their employer, 68% of people choose not to participate.

If you agree with 70% of people in this country, you believe that retirement policy should be a priority for lawmakers. Unfortunately for American workers, proposed solutions to the crisis have included raising the age at which Americans can receive full benefits, and adjusting benefits based on income.

Either way, American workers are on the losing end. That’s why we’re urging our readers to seek alternative, even unconventional strategies. Let’s stop depending on the swamp (literally and figuratively) that is Washington D.C., and take retirement wealth into our own hands.  

It doesn’t matter how old you are, or what your existing retirement plan is. 2016 will impact your retirement for the worse. The real question is how you plan to retire with dignity, before you’re in your late-70s and unable to enjoy it.

For the sake of planning, let’s play it conservatively and assume that Social Security will not exist when you need it. (Even if it does exist, the average payout is equal to working full time at a minimum wage job.)

Navigating a world without Social Security will take some savvy, but with enough information and planning there’s no reason that even the most amateur investor can’t experience a more than comfortable retirement.

The first step is saving. It probably sounds basic, but spending less than you earn is crucial. At the risk of sounding insulting, the discipline this requires might be difficult for the millennial generation. However, if you’re going to take your financial future into your own hands (and you need to), then it’s necessary at any age.

If you need some incentive, check out the table below. It shows the number of years it will take an investor to amass $1 million, depending on returns and monthly contributions.

chartreturnsEven with just 2% returns in the long run, you can be a millionaire by the end of your career.

Before we part, we'd like to extend a sincere thank you for joining us here at Pro Trader Today. We look forward to providing you with valuable investment research and commentary over the course of your subscription. Our core philosophy is that the more you know, the better you'll be able to take advantage of that knowledge and expand your wealth. We'll continue to share our insights on how you can boost your portfolio with flexible and safe investments that will help you break free of the traditional trading advantages, traps, and pitfalls financial institutions use to siphon off your wealth...

Pro Trader Today Research Team

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