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How To Prepare For The Social Security Eligibility Age Increase

By Mark Riddix

Social Security has been a hot topic during this election season. Many politicians have discussed raising the age at which individuals become eligible to receive Social Security benefits. Members of Congress and Congressional candidates have suggested raising the age of Social Security to 70.

But will the social security age be increased? Well, consider that the baby boomer generation is set to retire, which will place a major strain on the Social Security system. The government has borrowed from the Social Security fund throughout the years and now the time has come to pay the piper. The key problem is that Social Security will pay out more benefits than it has received in payroll taxes this year, and this is expected to continue into the next few years. In fact, according to many economists, Social Security is expected to regularly operate with an annual deficit in the foreseeable future.

As a result, it appears that changes to the Social Security system are inevitable. The government may have no choice but to postpone the age at which people qualify for Social Security benefits.

Since the social security age is out of your control, here are three ways to prepare for any potential changes:

1. Calculate your retirement needs.

According to the Department of Labor, only 43% of Americans know how much money they should be saving for retirement. You can get a leg up by estimating your retirement needs. Determine the amount of money that it will take to maintain your current standard of living. All you have to do is add up your monthly expenses and adjust it for inflation. Factor in a 3% cost of living increase and you should be well equipped to deal with your retirement needs. If the retirement age is increased, you already have the formula down, so you will just need to adjust to account for the longer amount of time you may be working. Alternatively, if you retire at a pre-retirement age, then you’ll have to factor in getting limited or no Social Security benefits for those years.

2. Max out your retirement plan.

Stocking up money in your retirement plan is more important than ever. In addition to Social Security running at a deficit, Social Security has also been frozen at its current level for this year, and therefore there will be no cost of living adjustment for seniors. This trend may become commonplace in the future. Furthermore, the death of the pension plan has caused many retirees to lean more heavily on Social Security. As a result, if you have not yet reached your retirement age, you need to start focusing on your personal retirement fund such a Roth IRA plan or your company-sponsored 401k retirement plan if one is offered. Try to contribute as much as you can to these funds; you’ll reap the benefits during retirement.

3. Pick up long term care insurance.

Most Americans are living longer than they every have before. It’s possible that you could live well into your nineties. One of the ways that you can prepare for your future is by buying a long term care insurance policy plan. Long term care covers costs that Medicare and other health insurance policies don’t pick up. Long term care insurance covers things like nursing home care, home care, assisted living, daycare, and hospice care. It’s best to purchase a long term care policy before retirement age as premiums get significantly more expensive with age.

Are you counting on Social Security to meet your retirement needs? Do you think that Social Security will still exist in its current form when you retire?

(Photo credit: Fabricator of Useless Articles)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, Your Financial Playbook.

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  • terry

    Is it true that if you die before retirement age the Democrats send you a card saying Thank You For Playing?

    • honestann

      Yes.

  • not given

    When social security started the average life expectancy was 63 years.

  • Trisha

    It is true that when Social Security started people were not living near as long! The problem I have with all of this is that the “government” has STOLEN over 2 TRILLION dollars from Social Security and replaced it with worthless bonds – It is like going into someone’s wallet – taking a few hundred without their knowledge and leaving an IOU. If this was in the private world SOMEBODY would be going to jail for sure. Will there be a higher retirement age coming…you bet there will – but should the government begin putting the money back that they have taken – damn skippy they should. I no wonder people don’t trust the government – they are just a pack of thieves!

    • r krotky

      in every sector or our economy , they are a bunch of thieves. Give me ! (ONE) example where our government has cured the problem. arrogant., but then, thats what we get for being sheep

  • Real truth

    This country is more screwed than most people know. I made some very lucrative investments in the last few years and I will be in very good financial shape. But living in this country will take it away from me so, I will be leaving this thieving country very soon. I will be living a much better life elsewhere. Location will not be disclosed.

  • honestann

    Do NOT max out your retirement accounts! In fact, sell and remove ALL assets in all retirement programs, convert all those funds (and all your savings) into real, physical gold and silver. The predators in DC already have bills written that STEAL all paper assets in all retirement accounts and force them to be invested in “ultra-safe” Treasury Bills!!! All “for your protection”, of course.

    Anyone who fails to clean out their retirement accounts is INSANE, or already senile.

    • Mike

      ‘honestann’ is absolutely right! Covert every asset that you can to physical gold and/or silver! And then make sure it’s all hidden from those thieves that ‘govern’ us.

  • http://toast.net Louis

    with Obamacare: they can have the death panels to cut back who will and can have any benefits[$$$$$$] from the federal government. when the abortion was decided by the supreme court to aloud abortions on demand, they have let over 60 plus million babies to die for abortion’s rights. when those children will not see the light of day to even to have there own children and work and pay taxes of their own towards ssi.that means our own ssi benefits can be cut or the age that can retire will raised to 70 in the next years to come. the loss of multiplication of the population because of abortion rights will cause ssi to be cut or raise the age to retire in the near future. the cause and the effect from abortion will be effect on the future generations to come. population growth is needed to have a healthy ssi program to continue, this means all the other federal programs that are on the books.

  • Greg

    YOU CAN HAVE MY SOCIAL SECURITY CHECK AND MY GUN WHEN YOU PRY IT FROM MY COLD DEAD HANDS !!

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