In this episode of Adam Talks, IRA Financial’s Adam Bergman Esq. discusses the possible end of Social Security, and how you can start preparing for it right now.
A Plan for Surviving the End of Social Security
This episode of Adam Talks discusses the potential end of Social Security in the United States due to reduced tax revenue and an aging population. IRA Financial founder, Adam Bergman, suggests that individuals should plan for the worst-case scenario and save smarter by focusing on retirement accounts such as a Roth IRA or Roth 401(k). He provides several examples of how much money one could accumulate by saving a certain amount each year at an 8% rate of return, depending on their age.
Bergman explains that Social Security benefits are based on the average retirement age, which has increased over time. The longer an individual waits to claim benefits, the more they will receive. However, he warns that benefits may need to be reduced by 25% if changes are not made to address the funding gap. Additionally, Social Security is taxable, whereas money saved in a Roth IRA or Roth 401(k) is tax free.
The importance of saving as much as possible, especially if one is starting later in life, is emphasized. Bergman provides examples of how much money can be accumulated by saving more each year or getting a higher rate of return. He also suggests that legal immigration could help address the funding gap by increasing the number of people paying employment taxes.
Further, Bergman encourages individuals to prepare themselves for the potential end of Social Security by saving smarter and relying on retirement accounts rather than Social Security benefits. He notes that while the future of Social Security is uncertain, individuals can take control of their financial future by planning ahead and making informed decisions about their retirement savings.
He then discusses the importance of maximizing retirement savings and preparing for the possibility of Social Security limitations or even its disappearance in the future. He emphasizes the benefits of saving in retirement accounts, such as 401(k)s and Roth IRAs, which allow for tax-free growth and withdrawals. He encourages listeners to take advantage of employer matching programs and to save as much as possible, even if it means delaying purchases such as a snowmobile or a boat.
Bergman advises listeners to simultaneously save for retirement and pay into Social Security, but not to rely solely on the latter. He acknowledges that relying on the government can be tempting, but emphasizes the importance of being self-sufficient. Overall, he urges listeners to prioritize retirement savings and take advantage of tax-free growth opportunities. While acknowledging that the future is uncertain, he provides practical advice for preparing for the worst-case scenario.
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