Of all the most reliable political footballs to kick around, the venerable and largely misunderstood Social Security system tends to get a lot of play – especially as election season begins to roll around, as it will for the next (what I will call miserable) 11 and a half months.
Social Security gets a bad rap, especially among pre-retirees or younger workers such as myself who believe – perhaps not so wrongly – that the benefits we’ve paid into the system will be long gone by the time our own retirement age rolls around.
Even labeling the benefits as an “entitlement” opens up a fierce semantic can of worms. True, the system is an entitlement program, but the word itself can be spat out with such a scowl and a sneer by certain candidates that you’d feel more socialistic than a Norwegian pensioner to have the gall to collect a check at all. That you paid for. By working your whole life.
A recent piece over at the AARP (an organization you may approach with same sort of feelings you have for Suze Orman, which is a shame because the AARP carries a huge membership and nearly as much political clout as our own industry) had some interesting insights about Social Security.
I encourage you to take a look and see if you agree, and if they’re the kind of insights you’d share or at least discuss with your own clients, who are feeling the same uncertainties about their looming (and perhaps lagging) Social Security benefits.
Most importantly, while the piece opines that Social Security is not, in fact, going bankrupt, nor will benefits totally dry up in 25 years when the surplus runs out, things get tricky when the author suggests that the wealth management tools that you can provide will never exceed the benefits that Social Security allows for – unless a huge sum of money is available for investment.
This may be true for those who have done absolutely no planning or saving whatsoever, but it’s clear that simply relying on Social Security as your only retirement income is a shaky prospect, and will be even more challenging in the future.
Perhaps it’s time to sit down with your clients and have the talk about the facts relating to Social Security and their retirement plans. Chances are you’ve got some insight and some tools to help them feel a little better prepared.