In just 18 short years, the Social Security fund is slated to run out of money. “There’s little that can be done to stop Social Security’s eventual collapse without tearing the program completely apart. The age to get full benefits has already been scheduled to be raised, the tax rates to support it have leapt more that five-fold since the program’s inception and the salary subject to that tax has increased from an inflation-adjusted $45,000 to over $100, 000” states Chuck Saletta, a frequent contributor to the Motley Fool column.
Once you add in the economy and the aging population, it becomes clear that Social Security cannot survive in its current form. Hopefully you plan on living at least another 18 years, and if you are counting on Social Security to be a big part of your retirement, you need to change that plan.
You must begin to do two things:
1) save to supplement your retirement at the earliest age possible;
2) take steps to preserve the assets you already have from unintended consequences such as an extended nursing home stay.
You can accomplish both goals.
Your investment portfolio needs to be diversified and should include holdings in the stock market as well as fixed investments that do not take market risk. You should also take steps to develop trusts and other legal documents to protect your existing assets. There is no financial product, standing alone, such as an annuity, that can protect your financial assets from a catastrophic health problem. You must couple financial products with legal documents in order to protect your assets.
The worst thing you can do is rely on the government to take care of you. You must review your investments and savings to insure you can provide an adequate income for yourself.
Ask us about our suggestions on your investments for your particular case, or … if you intend to purchase financial products or have a financial product and have questions about whether it is protected from a catastrophic illness.
