Browse Tag: Social Security

Russians Don’t Want Their Pensions Touched Either!

Early RetirementWe’ve recently written a lot about the U.S. Social Security program and the long-term funding problems it faces. We’ve outlined the problem, talked about potential solutions, and discussed how I’m thinking about Social Security in the context of our quest for financial independence and early retirement.

While it won’t solve any of our domestic problems, it’s interesting to note the U.S. is not the only country where demographic changes are having a major impact on how politicians are thinking about retirement.

Last week, Bloomberg posted an article noting that Russian President Vladimir Putin has faced criticism at home following a proposed plan to raise retirement ages in his country he originally announced in June.

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How I’m Thinking About Social Security and FIRE

Retiring On My TermsOver the past few weeks, we’ve taken a look at the Social Security program’s future funding problems, as well as a number of potential solutions that could close the coming funding gap.

Today we’re going to get more personal, and discuss how I’m thinking about Social Security as we continue down our path towards financial independence and early retirement.

I’ve written in the past that I haven’t factored any potential Social Security benefits into the framework I’ve developed to measure our progress during our quest for financial independence and early retirement.

But I’ve also mentioned I do expect to eventually receive something from the Social Security program when I am old enough to claim retirement benefits.

So how do I explain this seeming contradiction?
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How To Fix Social Security

Early RetirementLast week, I wrote about some of the problems facing the U.S. Social Security program.

Although the combined Social Security trust funds had $2.9 trillion in assets at the end of 2017, demographic changes over the next decade and a half are expected to eliminate that surplus by 2034. At that time, anticipated tax income on workers is expected to fund only 79% of scheduled benefits to retirees and disabled beneficiaries.

Fortunately, there are a number of potential solutions that could help close the Social Security funding gap. The question is whether American politicians will come together to make some difficult choices today, or keep kicking the can into the future, when the problem will likely be more difficult to solve.

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What’s Wrong With Social Security?

RetirementThe Social Security Board of Trustees recently released its annual report on the status of the programs it oversees, which currently provide benefits to around 62 million Americans.

By and large, the numbers were consistent with where they were a year earlier.

Near term, the Social Security system is fine.

Longer term, changes need to be made to Social Security to maintain its viability given expected demographic changes.

The good news is the numbers may not be as dire as the mainstream media has led some to believe, and relatively modest changes could ensure Social Security will continue to provide benefits to tens of millions of Americans for many decades to come.

The bad news is the necessary changes will likely require copious amounts of common sense and bipartisan collaboration, both of which seem in short supply in many parts of the United States these days!
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