Social Security Uncertainty

Social Security is a social insurance program that was signed into law by Franklin D. Roosevelt in 1935 as part of the New Deal. It was designed to benefit retirees, the disabled, survivors, and the unemployed. Funded by taxes that are taken from your paycheck, Social Security represents the largest portion of the U.S. budget in 2012 at 20.04 percent.1

Programs like Social Security and pensions may help in retirement, but the uncertainty surrounding them means that you may have to fill a gap in your retirement income. Investing in your retirement plan may be a good way to fill that income gap.

What’s the problem with Social Security?

One factor affecting Social Security is that people are living longer. As of 2007, a 65 year old man in the U.S. is expected to live an additional 17.2 years. American women of the same age are expected to live an additional 19.9 years2 – increases of 13.9% and 5.3% since 1990. Those numbers translate into more years that retirees may receive Social Security benefits.

Another factor is the large number of baby boomers. In 2008 millions of baby boomers began to retire. Every year between 2008 and 2025 another group of boomers will reach the early retirement age of 62 and begin to take advantage of Social Security payments. Since baby boomers didn’t produce a number of children equal to their own generation, the number of tax-paying workers began to shrink.3 More people taking money out while fewer people are paying money in, means that Social Security benefits may gradually be depleted.

What does it mean to me?

You may not want to rely fully on Social Security to support you financially in retirement. While benefits still may be available, they might not be enough to support your standard of living.

To find out how much you might receive from Social Security, you can use the Social Security Online Retirement Estimator. You can compare this estimate to your current income and project how much more you may need in retirement. Then, enroll in your retirement investment plan today to potentially fill the gap.

Get the help you need

Talk with a Retirement Specialist if you have questions, and to get started investing for your future.

2Centers for Disease Control and Prevention, Health, United States, 2010: With Special Feature on Death and Dying, Table 22. Life expectancy at birth, at 65 years of age, and at 75 years of age, by race and sex: United States, selected years 1900-2007, accessed 9/22/11

3Social Security’s Problem,, accessed 10/25/11

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