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Retirement Planning > Social Security

Gen X needs to know

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Hey, guys, guess you didn’t want to touch that third rail?

While President Barack Obama and Gov. Mitt Romney sparred over domestic issues, they said precious little about the future of Social Security for younger generations.

I know. I took notes. (Yes, I’m that kind of crazy.)

President Obama kicked off the discussion on entitlements by saying that both he and Romney agreed that Social Security was “structurally sound” and only needed “tweaks.” Such as…?

Neither incumbent nor challenger got more specific than that. Instead, they launched into a spirited discussion of Medicare, another highly combustible issue.

Read our Twitter feed from the debate.

So I did a little research. On Romney’s website, he says that retirees and near-retirees will see no changes in their Social Security benefits. For those whose retirement is farther off in the future, he proposes “slowly” raising the retirement age to account for increased lifespans. Which age would that be? 68? 72? 95? He doesn’t say.

If those future retirees have “higher incomes”again, no numbers specifiedthen their benefits would be lower, or so Romney proposes.

The White House website has a long entry on seniors and Social Security. In it, President Obama emphasizes his wish to cobble together a “bipartisan solution to strengthen Social Security for future generations,” keep benefits intact and not leave the program “to the fluctuations of the financial markets.” It further mentions efforts to expand access to workplace retirement plans.

I’m not writing to endorse either candidate or their plans (which to me seem vague at best). What shocked me was how little was mentioned during the debate about this important program, one that many people, now and in the future, will rely upon for their retirement income.

Long-term future shaky

Long term, the future of Social Security appears shaky. By the U.S. Social Security Administration’s own estimate, the Social Security Trust Fund will be bare by 2033. While it’s true that is 20 years from now, it’s also when the oldest of the Gen X cohort will be 67.

Remember, this is all coming at a time when private pensions are shrinking as fast as the average 401(k) balance. And as our population ages, there are going to fewer workers paying into the Social Security system.

Now, if you’re a member the Silent Generation or a baby boomer, this doesn’t matter to you. But what if you are Gen X’er? What will your golden years look like? How will you fund your standard of living after you leave the workforce?

You could work longer. In fact, an IRI study found that many in Generation X and even baby boomers want to work into their late 60s and beyond. Admirable, but perhaps not very realistic. As of 2011, only about 18 percent of workers were 65 or older.

It’s easy as a healthy 35 or 45 to think you can work forever. But as John Lennon famously said, life is what happens to you while you’re busy making other plans. An unexpected illness, disability or family caregiving crisis can derail that plan.

Does anyone want to work forever? Will companies be amenable to hiring and retaining older workers that command higher salaries?

So if you are a member of Gen X, what’s your retirement plan? Who knows what the politicians in Washington, D.C. will decide to do with Social Security, if anything at all. One thing is for sure: Social Security will not be the same for you as it is for the boomer generation.

A while back, one of our columnists, Sheryl Moore, suggested that annuities should be sold to younger people. Why not? With a radically altered Social Security benefit scheme and fewer and fewer private pensions, Gen X is left to fund their own pensions. Annuities could do that.

Maybe it’s time Gen X stopped thinking about annuities as an “old person’s product” like motorized wheelchairs and Buicks.

For more from Maria Wood, see:


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