2033: The End of the World and More Good News
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!
In my honest opinion the debt chrisis of our generation isnt going to get better any time soon. The only way our financial crisis can get any better is another world war to put everyone back to work. But with most world leaders trying to avoid conflict the chances of this are slim. Its easy to point our fingers at poloticians and law makers for the mess wer're in. But we can't forgot about the people who lived outside their means. I'm talking about the people buying million dollar homes on 50k salaries and putting a lean on their house because they really needed a boat for the summer time. A credit card in irresponsable hands might as well be a hand gernade. The hole we hav dug ourselves into is to tall to climb out now. To really get this country back on track we're going to need some outside help because leaving it up to the government just isn't an option anymore. For my own retirement plan I want to save up a decent amount of money and move to a foreign country where the cost of living is significantly lower than here. Some where warm like South America.
ReplyDeleteReading about all of this “good news” is making me really nervous for my future. With all the debt and bad economic situations happening in the US, I am starting to think about all the choices that I need to make in the future. With tuition increasing , I am starting to look at schools that I can afford because I do not want to be in debt right when I get out of college. Also, I have been looking at careers that have stability and in which I have the ability to make a good amount of money. Making choices on these issues will help me get a good start on starting a debt-free life and hopefully I can begin to save for my retirement. It is sad to see that nowadays college students have to worry about how their future will look in 20 years. For many of us, making these chocies can be scary because we want to follow our passion instead of thinking about reality. We sometimes live in a bubble and do not pay attention to the conditions happening around us. If we take the time to plan out the next years of our lives and make smart decisions about our economic future then we will be able save money and have a better economic sense of the world. Most importantly, it can save us from the thousands of dollars of debt.
ReplyDeleteThis finnancial crisis has been built up and strengthened since day one. People such as Ron Paul have predicted this disaster and believe its only getting worse. Its like a giant bubble, it will keep growing until it eventually pops and when it does we're all going down with it. Im not surprised that the U.S government will have to cut social security checks, since the national debt keeps building. China practically owns us, from all the money they have given us, but whats not to say that was their plan all along. What makes me furious is that the people who caused this issue will not have to suffer the aftermath. It truely is up to our generation to fix this mess and there has been many brilliant minds that steped up to the plate. However, most of them are being shot down by the senail politicians of yesteryear. Therefore, if we ever want to wipe our finnancial slate clean, we must keep an open mind and put all our efforts into convinving our polticians to change their spending habits.
ReplyDeleteWell considering that I myself work to put some cash in my pocket this obviously sucks. I will never see the money that I pay out to social security everytime I get a paycheck. This being said I would like to think that the government might figure out a way to fix the current issue at hand by the time im am capable of retiring in forty years. However there is a simple solution to solving this entire "lack of money" in the United States. I personally believe that the legalization of marijuana in the USA will pull the country out of the current economic hardships. Taxing marijuana would result in a 45 to 110 billion dollar increase in the wallet of America. Considering no one has ever died in the history of marijuana use, and more people die from peanuts and falling vending machines EVERY YEAR, it's time to make an informed decision and stop locking up people for life because of petty marijuana possesion charges. Seems like a pretty simple way to produce billions of dollars a year and stop putting "criminals" in jail over a plant. A very easy solution to the lack of money in this country.
ReplyDeleteThis situation is really quite frustrating for all of us younger people. It is not fair that we are deprived these things that we pay for. If we are having money taken out of every single one of our paychecks to pay for this, then we should be getting our rightful part of it later on in life. If we are not going to receive are benefits, then we should stop having to pay for it. I don't know when this financial crisis is ever going to end if the politicians keep following the same corrupt trends they are now.
ReplyDeleteSaving for retirement is a scary thought. I am skeptical though of all these future predictions. Placing a number on future social security checks or the national debt per person ratio is almost impossible because of the inflation rate.
ReplyDeleteNo one knows who the next federal reserve chairman will be, and that person will dictate monetary policy which could dramatically alter the inflation rate. The ability to inflate the currency is why lawmakers are not worried about the debt. Add another 0 to each bill and the current debt isn't a problem. The actual increase in the money supply is more complicated than just adding a 0 however. It comes from a system of loans called fractional reserve banking, but its still not hard to increase the money supply through this.
Unfortunately inflation rewards debtors and punishes savers. This makes saving your dollars for retirement unwise because the value of each one will drop every year. I recommend saving nickels for long term savings. The Melt value of a nickel is a little over 5 cents right now. This means, as inflation continues to hurt the dollar, the price of the metal in each nickel will increase. Eventually the US mint will probably change the metal composition of the nickel and then they will be traded for their melt value, not their face value. This is exactly what happened when the metal composition of pennies changed from copper to zinc. Now copper pennies are traded for about 2.5 cents.
I don't think it's fair at all to reduce social security but at this point it should be expected. I'm glad to know my mom and my grandma won't fall into the same category as me and they will still receive benefits. Being young I have time to prepare for this, I have a whole career in front of me and can earn and save. I'm scared for the current generation of people who are going to be relying on the system our government has broken. If the benefits are reduced to $750 a month i don't see how people could survive without savings. Food, housing, insurance, cars, gas, medical care and homeowners taxes will not be covered by that money, especially in a state like California where the cost of living is so high. Elderly will either be forced to move out of state or in with their families. Its going to take a long time to fix the problem that has been caused but at least I can prepare myself.
ReplyDeleteWhen it rains it pours. The generation that is looking to improving their self and looking forward to go to school and succeeding in life will get the privilege to clean up the mess or should i say "debt". As if raising tuition will solve the problem to everything. If education had no problem with it at little cost then there should be no rise in tuition.
ReplyDeleteIn terms of retirement, I am young! I do not want to be saving for retirement! All I want to do now is spend, spend, spend. It looks like I will have to save, save, save, because my check will be cut my 25 percent. I rather keep my money in a fireproof safe or in my savings than put it in social security if it is going to be cut by that much.
To drown myself in rain, or debt, I will be in debt $135,547 by the year 2036. That just makes everything a whole lot easier. If more jobs were available and unemployment was not so high there may not be this problem, but thats not the case. It really does get better.
After reading this, I think the American government should working on the economic problems, and the American companies should do their responsibility for the government. Right now, a lot of American companies outsourcing to other countries, this is means that U.S. citizens lost a lot of job positions. Another effect about outsourcing is if outsourcing’s companies don’t take their money back to U.S., the American government can not charge taxes that more; this is means that U.S. companies are sale technology and products to the other countries, but U.S. government only can charge a little taxes from this action. If the government charges people more tax to keep the social security working, and people don’t have enough money for their vacation and other leisure use. If the government didn’t charge more from workers, and the old people don’t have money to living. I think the government should charge more money from companies but not younger workers.
ReplyDeleteWell! the politicians are representatives of a nation.I think probably earlier wrong decisions of the governments is putting citizens in trouble by cutting their social security benefits. In fact, with billion dollars debt of the U.S. only to China, it was predictable that sometimes later these debts should be paid off. So I think it is the time that American get more involved in political system and choose people who take more responsible decisions. Meanwhile,what ever me and you do to avoid this loss, there still will be many Americans who will suffer.
ReplyDeleteThis is a big deal. Just thinking about what's going to happen in the future makes me shiver. I just hope there is a solution and a good one too. I am the younger generation so of course its going to effect me. I am a full time student and work 25 hours a week. I am already drained emotionally and physically, and money wise lol. I hope the government thinks wisely and think how it really is going to effect everyone.
ReplyDeleteThis is a huge issue in today's society and it seems like things are only going to get worse. I agree with Angela I. being a full time student and working 25 hours is hard. But imagine not having a job at all in todays world! I'm mad about the that this is what the future has in store for myself and the rest of my generation. Hopefully the government has a plan or comes up with a plan that will save the U.S. It seems like everything is just going to go down hill. Everything is getting more expensive and money is being taken away and there are hardly any opportunities to earn money from jobs with all the budget cuts and dept that we are all in.
ReplyDeleteI already knew things were bad, but I didn't think things were this bad. I was honestly shocked when I read this because they're taking money from social security. I'm not surprised tuition is increasing. I honestly follow the news or anything because I don't really care and reading stuff like this just pisses me off. I seriously can't believe that we're going to have to pay for this debt off and not the people who caused it, but when they're prosperous we get nothing in return. It's so ridiculous. I have thought as far as my future kids college tuition, but not so far as retirement. After reading this, I guess I will have to think about it soon.
ReplyDeleteI can't possibly say that I have been unaware of the financial crises that's been going around in the U.S. I feel like all of this is just going to make us work harder then we already are (if that's possible). I work part time, am a full time student, and am eagerly trying to build my resume by volunteering at hospitals and other types of community services. I hate putting my faith in other people and relying on others, especially when it comes to the government. My philosophy is that we are all on our own, so I'm working hard for myself and trying to prepare as best as I can for "more good news". I wish I could say I'll be able to help the government overcome this crises or relieve it, however I'm no expert.
ReplyDeleteWhen I was in high school, I would always here about our economy and how bad it is. Personally, I have lived and experienced the affects of the recession with my family. It hasn't been easy for most people. The majority of Americans seem to be living pay-check to pay-check. Most likely the current generation won't be collecting social security checks when the reach the legal age. When it comes to the government and economy, its going to take a while for some changes. Everything just seems to be getting worse instead of better with tuition going up. How much money will a young adult be in debt by the time they finish their education? I honestly don't want to know.
ReplyDeleteThis blog really made me think about my future. I always saw myself retiring at a sunny warm beach in Mexico. Enjoying life after a work filled life. I think I deserve it if you ask me. Now to think that I would be stuck working even longer kind of disapoints me to be honest. Not only are we getting less money at an older age they also make life before retirement harder. We have to pay more for our education, and once we get it we aren't even guranteed a job to pay off the debt we get ourselves in. Isn't that sad. And to think it is all because some people who are in charge made the wrong decision. But lets not let this get to us life's beautiful with or without a fair well deserved retirement. Lets just be more careful and start planning for a very far ahead future.
ReplyDeleteSo much for good news. It's so upsetting to hear how this economic situation isn't improving. I knew it was bad, but I didn't think it was this bad. As a college student, I know many of us are just struggling to graduate and find jobs. We aren't trying to worry about the debt we owe or how Social Security will become broke by the time we find a job (if we even find any). How are we supposed to save money if there's a possibility we may not even find a job after we graduate? It's unfair how we have to pay so much for an education just to graduate with a large amount of debt and then in the next 20 years have our Social Security reduced.
ReplyDeleteEveryone tells me to get a head start on my retirement plan but I never took it seriously. After doing the math by the year of 2033 I will be 39 years old. So my benefits will definitely be cut. What my plan to help me out is that every paycheck pull out $50 to $75 dollars and put it in a savings account to help build more money. So even though I will not be able to retire by the age of 62 all I need to do is find a job I love and I am passionate about that I will not think about retirement. My goal is to be a police officer and one thing I know is the average age an officer retires as an officer is 55. Even though our trustees are going to be cut the only thing I will be afraid of is future generations after us. If we are getting cut then imagine how much percent of that $750 dollars will be cut. I think it is a good idea to try and get ahead in your retirement after reading this post.
ReplyDeleteAs a 27 year old, it is discomforting to know that I am already behind on my savings plan. Any savings after graduation will go toward school loans and a down payment on a home. It is unfortunate that even younger graduates have the same idea and will not start saving until years from graduation. It has been proven that by waiting these extra few years, that the total savings at retirement is significantly lower than it would have been if saving had started sooner. It is well known to people my age that social security will run out by that time, so twenty something year olds know that they will need to start saving once they can feasibly do so. What I cannot fathom, is that a social security fee has been deducted from my paychecks since I was 14. This 'tax' is nothing other than thievery by the government but it is not surprising. I am now used to hearing about how our officials will do anything to starve its American people of any financial freedom for the benefit of fancy First Family vacations and huge dinner parties in the White House with performers Beyonce and Jay-Z. Thanks Obama, that is exactly where I wanted to spend my tax dollars. It is disgraceful.
ReplyDelete