Social Security Is not the Complete Solution

Many Americans must be relying on the Social Security System for their retirement if the statistics about how many have little or no retirement provisions. Ideally everyone should have started to save for retirement as soon as they started their careers. The reality is that very few are doing that even though those that start a 401K can often get their input matched by their employer; money for nothing and growth through compound interest. The money can be taken immediately so that it is never regarded as available to spend.

The added problem is that the Social Security System is in trouble. People are living longer and therefore the demands on the System are increasing. Estimates suggest that by the mid-2030s benefits at the present level will be simply unaffordable. Cuts are being suggested of up to 25%. The most obvious solution is increased taxation but that is currently extremely unpopular with the current majority in Congress, the Republicans. As time goes by it will be very interesting to see how the situation develops.

Next Year

Current System recipients have just received the news that there will be no rise in 2016 because the inflation rate has been below the level that would necessitate a cost of living rise. It means the average monthly payment next year remains at $1340 for an individual $2210 for a couple. The amount that a person 65 and under can earn while claiming before facing a reduction in benefits stays at $15720. This amount of benefit alone really does not provide for comfortable retirement by itself.

Why Delay?

It is easy in early adulthood to make an excuse that there are more important financial issues to face than saving for retirement that is so far away. Fairly soon you may have a young family and the excuses continue. Suddenly you reach middle age and the years are running out. If you had saved $100 a month or even $50 by middle age you would have had a sizeable sum instead of nothing and a limited number of years left to start saving.

Surely these small amounts can be put into a budget, even for someone that perhaps has a student loan to pay off? The recession should have been a lesson to everyone about the fragility of their finances.  It may be a simple statement but you should aim to spend less than your regular income and save the balance each month. If that includes looking at your regular bills then do so. Do so anyway because no one should waste money unnecessarily!

Eliminate Waste

You should certainly look at whether you are in fact wasting money. If you are paying high interest on a credit card balance you are wasting money. It is a fairly quick and simple process to go online and get a personal loan to pay that balance off. The rate of interest applied is much lower than anything a credit card company will offer. That applies even if you have a poor credit score although you may face a higher rate than someone with a good one. If you can prove a regular income and a nation21 loans look affordable then you ought to get approval. Other major monthly expenditure items to look at will include utility supplies, telephone network and insurance premiums.

At the end of this exercise there will hopefully be a surplus that can be used in a positive way. Retirement is obviously one thing but building an emergency fund to meet unexpected problems is another. It is important to resist extravagant spending until these two priorities are in place. Do you really need a big new automobile? It depreciates as soon as you open its doors. Certainly if you have created a firm financial base then there is nothing wrong with a little luxury.

The improving economy in the USA means that there is a chance for anyone that wants to work to do so. Some rode the recession without a problem while others are still repairing their finances. Whatever your situation you should follow a sensible budget and adapt it to any changing circumstances. Every successful business in the world does that so why shouldn’t you?

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