Massive Cuts to Social Security Are Coming and Should Worry Us All

The mother of all political battles is coming, and it’s about a wall.

15709No, not that one. It’s another, much bigger wall. One that fewer people are talking about — so far.

It’s the wall that Social Security is due to run into in just 15 years.

That’s when, say Social Security’s trustees, the program’s trust fund is scheduled to run out of money. If nothing else is done, they say, after 2034 Social Security’s annual income will only be enough to pay “about three-quarters of scheduled benefits.”

We’re talking about a 25% cut in payments.

How big a deal will this be?

As it happens, the Federal Reserve just put out a report that tackles this. Alas, it got very little attention, because the media and politicians were covering a $5 billion boondoggle that may or may not get built in the desert.

According to Fed data, at most one quarter of people currently nearing retirement are going to be able to shrug off any cuts at all in Social Security. Actually, it’s probably considerably less than one quarter.

And everyone else will be in serious trouble. Half of those nearing retirement will end up in dire straits. That’s because most of them have little or nothing in private retirement plans.

We have tax-advantaged – cash value life insurance that utilizes stock market indexes so you have the upside of the market with no losses in a down market – this strategy can accumulate large sums of money that can be accessed tax privileged to supplement your retirement.  In addition, these plans, as well as term policies, have Living Benefits with Critical * Chronic illness riders that can bail you out when a severe illness strikes.

Learn more by contacting me at mark@health-life-dental-insurance.com or call 1-800-257-1723 x 0101

Brett Arends is a MarketWatch columnist. Follow him on Twitter @BrettArends.This article originally appeared on MarketWatch.
Mark Deschenes

Author Mark Deschenes

More posts by Mark Deschenes