Social security has been created as a wealth building tool by providing savings for retirement. It would help us to supplement our income as we reach retirement age by paying us back after so many years into the system.
As the baby boomers retire, we see that the system has huge problems that cannot be solved in the short term and that the long-term prospects are bleak. For the first time in 30 years, we pay less to the system than it does. It is expected to continue this way for years.
In creating a wealth building strategy, social security can not be taken into account. The system is bankrupt.
Social security is no longer the cornerstone of wealth accumulation for retirement. What happened
1. The surpluses deposited into the system by baby boomers have been “moved” by the US. Treasury to cover the deficits of other federal programs.
2. The United States Treasury has issued “IOUs” to the Social Security Administration to cover the debt.
3. As the baby boomers retire, the administration must cash in on these IOUs to pay retirees.
Welcome to reality
What makes the Social Security Trust Fund a total boondoggle for wealth building?
With a national debt of more than $ 13 trillion, there is no money to repay the debts to the trust fund! The only way the Treasury can honor one of its IOUs is to get the Federal Reserve to print more money.
How will printing more money affect your wealth building plans?
1. As it will weaken the value of your money, leading to higher inflation, the prices you pay for goods and services will rise.
2. It can even lead to hyperinflation. Hyperinflation is when a currency rises at a rate of 50% or more per month. This happened in the south during the civil war, it happened during the Weimar Republic of Germany and recently in Zimbabwe, which is still reeling from the effects. We are at the beginning of the 19-year transition to the transition from Baby Boom. In 2000, there were 72 million baby boomers. More than one money pressure will be needed to cover social security costs. If your money is worth less and less, how will you build wealth for your own pension?
3. According to the consumer price index, prices have doubled since 1982. If the federal government prints money to “save” Social Security, your money may go to the grocery store, gas pump, and mortgage / rent instead of your wealth-building plan.
You must develop a wealth-building plan for your pension that does not depend on social security. It is the only chance you have to compensate for the possible demise of the social security system.