With all the new innovations in medical technology, retirees are now enjoying 20, 30 or even more years in retirement.  That’s good news on the face of it, but with that fact comes the stark reality that a great many people haven’t saved enough to live that long and run the very real risk of running out of money before they die.  ‘

I hope it doesn’t come to anyone’s surprise that Social Security was never meant to be your sole means of retirement income.  You know those annual statements that you receive from the Social Security Administration?  The ones that tell you what your monthly benefit will be at different ages of claiming social security based on your wage history? 

If you’re under 60 years old, it’s very possible that that estimated benefit will be cut before you can claim it.  It all comes down to a big math problem. 

When the Social Security Act was signed into law in 1935, there were 42 workers paying into the system for every one worker being paid.  At that time, the retirement age to begin receiving benefits was 65 and the life expectancy of the average American worker was 62! 

Fast forward to 2017.  Lots of Baby Boomers are deciding to retire early at 62 and take a reduced benefit.  They could easily live another 30 years.  According to the Social Security Administration, the ratio of workers paying in to those taking out has been reduced from 42:1 to 3:1. 

The Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Funds projects that by 2040, the ratio will be 2.1:1.  That’s not sustainable!  The cold, hard reality is that you can’t depend on social security being there for you as it was for our grandparents and parents. 

Now, more than ever, you need a solid plan to ensure that you can live comfortably after you retire, be financially protected in case of poor health (Medicare’s not a sure thing either!) and maybe even leave a bit of a legacy to your family or charities if that’s something you deem important.