We've spent a lot of time in our regular conversations talking about the looming retirement crisis around the world.
The data is horrific. Pension and Social Security programs in nearly every developed nation are woefully underfunded.
In the United States, senior government officials including the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, have stated unequivocally that Social Security's trust funds will run out of money in 2034.
More importantly, there simply aren't enough workers in the work force to sustain the program over the long-term.
It's something known as the 'worker-to-retiree ratio'; essentially, Social Security requires a certain number of workers paying into the system for every retiree receiving benefits.
In 1960, for example, the ratio in the US was 5.1 workers paying into the system for each retiree receiving benefits.
By 2000, the ratio had fallen to just 3.4 workers per retiree. And today Social Security estimates it's just 2.6 workers per retiree.
Do the math– it just doesn't add up.
Social Security tax in the US amounts to 12.4% of a worker's salary. So when the financial burden of a single retiree's benefits is paid by just 2.6 workers, the resulting tax revenue won't be sufficient to pay benefits unless:
1) Taxes on those workers are dramatically increased, and/or
2) Benefits for retirees are slashed.
It will probably be a combination of the two.
Bottom line, the people who run this program are telling the entire world that Social Security will soon run out of money; and they're publishing alarming statistics about the steep decline in the worker-to-retiree ratio.
This isn't some wild conspiracy theory. These are facts coming from the government itself.
And given that most people probably hope to retire at some point in their lives, this REALLY matters.
It would be utterly foolish, in light of such objective information, to simply assume that the problem will resolve itself and Social Security will be just fine.
Are you really willing to bet your future livelihood that a bunch of short-sighted Congressmen are suddenly going to do what's necessary for their constituents?
This problem is fixable. But it means taking matters into your own hands: You can't fix Social Security. But you can ensure that your own retirement is funded.
Step 1– Start putting more money away for retirement.
This is even more important if you're younger; anyone under the age of 40 ought to exclude Social Security altogether in his/her retirement calculus.
Now- here's the good news: it's easier than ever to generate extra income on the side.