Читать книгу Horse Economics - Catherine E O'Brien - Страница 38

Creating your own plan for retirement is prudent, especially if you are now in your twenties or thirties. Unless substantial changes—other than privatization—are made to the system, it appears as though Social Security will not sustain future retirees at the benefit levels we currently expect.

The Social Security Administration estimates that by 2018 it will begin to pay out more than is collected in taxes, and by 2042 it will have exhausted its reserves. The reasons given for this long-range financing problem are that people are living longer and the birth rate is lower: in 2008, 79 million “baby boomers” will begin retiring, and by 2030, there will be nearly twice as many older Americans as there are today, while at the same time, the number of workers paying into Social Security per beneficiary will drop from 3.3 to approximately 2.

As a general rule, financial analysts estimate that most people require at least 70 percent of their pre-retirement income in order to live comfortably; however, with today’s rising health care costs, 80 to 90 percent is now often required by retirees. Social Security benefits are supposed to replace 40 percent of this and the balance comes from pensions, individual savings, and investments. Because of the looming problems with the Social Security System, it now appears that pensions, savings, and investments may become the mainstay of retirement income (for more information, see Resources, p. 220).