Receiving that last paycheck can be very unsettling for most people entering retirement. A rational calculation of preparedness only modestly soothes the emotional fear of running out of money. Knowing with certainty there will be a check coming in every month can provide considerable emotional relief.
Historically, Social Security has provided at least a good portion of this relief. In fact, Social Security is typically the largest annuity most people have. Retirees know it will be there, and they know they can’t outlive the income.
But have you read your Social Security statement lately? In it, there’s a line that says: “The Social Security Board of Trustees now estimates based on current law, in 2037, the Social Security Trust Funds will be able to pay approximately 78 cents for each dollar of scheduled benefits.” Do any of us believe Social Security will be as good in the future as it has been in the past?
The answer is unknown, which only adds to the stress and uncertainty of retirement, particularly with so much discussion in Washington, D.C. about possible changes to Social Security and other programs that aid seniors.