If you have busted your butt five or six days a week to live in the Bay Area, and plan on retiring to live in the fabulous lifestyle to which you have become accustomed, you better start saving as soon as you graduate from college. The Social Security Trustees report released in April 2012 claims that social security will go broke in 2033 - that's a mere 21 years from now.
So what does that mean? Everyone receiving a check in 2033 will have their benefits slashed by 25 percent -- that $1,000 check will be reduced to $750. But will the government really take social security away from your parents and grandparents? Probably not. In other words, if you're over 41, you'll probably be okay, but I'd make some alternative plans just to be on the safe side.
If you're under 41, your benefits will definitely be cut. Alternative plan? Well you probably won't get to retire at age 62.
More Good News
Even worse in a April 2012 speech President Obama said
Today’s twentysomethings hold an average debt of about $45,000, which includes everything from cars to credit cards to student loans to mortgages, according to a PNC financial independence survey released last month. Unemployment for those 18-29 is 12.4%, well above the national rate of 8.2%; and young people face an increasingly complex global economy that is credit-driven and puts more responsibility on individuals to plan for and manage their retirement accounts.On top of that every American’s share of the national debt is $50,097 (5/8/2012). By 2036, that number will be nearly $135,547 and guess who gets to pay that back? Not some esoteric "they", "them", or the "1 percent" but YOU!
Even More Good News
SF Gate reports that the University of California is planning to charge students at least 6 percent more for tuition next fall - an extra $732. Even more bad news - those numbers will rise if taxpayers don't pass the upcoming ballot measure to raise taxes. SF Gate suggests that the current short fall is connected to an estimated $1 billion shortfall in corporate taxes.
The solution lies with you. As you leave college and enter the working world you will be faced with fixing this mess because the current generation of politicians has failed woefully.
So while you're making those school and career plans, start thinking about your retirement plan!