With endless uncertainty and political turmoil surrounding Social Security, it’s no wonder that most Americans feel very wary about Social Security. They simply don’t have any confidence they will receive Social Security at all – or at least enough of it to get them through the final years of their lives. Although Social Security has many shortcomings, we tend to not be proactive about creating an alternative safety net. Here are the financial strategies you should adopt now to prepare for the very real possibility your Social Security will run out on you:
How to Plan for the Future without Social Security
- You need to pull out of high-risk investing: Wall Street is chock full of high-risk investment products that offer zero stability or security. If you’re trying to save money so you can avoid having to rely so heavily on Social Security, you definitely should be divesting from Wall Street’s risky, fee-laden investment products.
- You need to minimize your tax liability: Uncle Sam takes a sizeable chunk of your income; the more you earn, the more the government takes in taxes. You should seek to minimize your tax liability by moving your money into tax shelters that can help it to grow tax-free or that at least can lower your overall tax liability.
- You need to end your focus on hitting numeric savings goals: The reality is that you have no idea how much money you’ll need to live out your life, particularly during your retirement years. Thus, you need to stop focusing so narrowly on hitting a magic savings target, and more on a comprehensive wealth-building strategy.
- You need to leverage your money more effectively: Because you need to be earning a high rate of return on a fixed amount of money, you should be looking for ways to leverage your money more effectively. In other words, you want to adopt a circular investing strategy in which you seek to keep your money moving through multiple investment products, each earning a steady rate of return.
The prospect of not being able to count on Social Security to get you through retirement is depressing. Fortunately, there are steps you can take at any age to compensate for that scenario. You should start by pulling out of Wall Street’s risky investment products, minimizing your tax liability, not focusing on artificial savings targets, and leveraging your money more effectively.
For more information about securing yourself financially for retirement, visit Paradigm Life’s section on Getting Ready to Retire at Any Age.
Don’t Rely on Social Security – Take Control of Your Retirement Plan
