There was an interesting article on MSN Money the other day entitled, "Did the government make a Social Security goof?". This title didn't really surprise me since the future of Social Security has been an ongoing issue for some time now. According to the article:
"…the Social Security Administration has grossly underestimated the money it needs for retiring Americans "to the tune of $800 billion by 2031, more than the current annual defense budget."
And if nothing is done, they say, the Social Security trust fund will run out two years ahead of current government predictions."
However, what I came to realize as I read the article was that while I'm concerned about the future of Social Security, since it's something I've paid into for a number of years, I'm not letting it control my retirement future. And regardless of what the federal government does or doesn't do to remedy the Social Security issue, I'm not going to let it "goof up" my retirement.
Not Counting on Social Security
Issues with Social Security have been around long enough for me to know better than to count upon it as my soul support in retirement. This doesn't mean that I can estimate this benefit and factor it into our retirement plans.
By using the benefit estimator at the Social Security Administration's website, I can get a pretty good idea of what my wife and I are supposed to receive in benefits. Then, I knock off about 25 percent in value, add a few years to our expected retirement age, and use this as our true estimate of benefits. Even then, I don't count on it.
A Continued Work Backup Plan
As a self-employed individual, I have the option to work when, where, and how I like. This means that I also have the option of carrying my work (at least some of it) into retirement with me if I'd like. While I'm not counting on working full-time (since that wouldn't be much of a retirement), I could at least utilize my work for supplemental income or at worst, work full-time should a financial emergency occur and we need the extra income.
This work backup plan adds an additional element to our overall retirement planning, hedging other areas such as Social Security, stock market based investment income, savings, and other investments.
Knowing How to Stay Self-sufficient
I don't like to rely on others. Whether it's for my retirement income, my current work or whatever, I prefer being self-sufficient. Maybe it's because as a child, I spent a lot of time with my grandparents who lived through The Great Depression. I'm not really sure.
Whatever the case, knowing how to stay self-sufficient is another important aspect of goof proofing our retirement against the government. We recently grew a garden to better learn how to grow our own food. We work at creative meal options to maximize available food and leftovers while minimizing waste. I work for myself, therefore taking the risk of unexpected layoff out of the equation. And we make use of a variety of resale options -- both to buy and sell lightly used items -- to save and/or make money. This way, we're training ourselves to be more independent in retirement when income might be lower, expenses higher, and government even less reliable (if you can imagine that!).
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