Something very strange has happened since the pandemic; workers have altered their retirement plans. In a time when people are living longer, the average American doesn’t expect to work past age 62 or 67. According to the Survey of Consumer Expectations, there was no definitive reason given for the decline in planned retirement age and results were “broad-based” across education and income. Could the recent reports predicting the end of social security payouts by 2035 be a motivating factor? Possibly.
The latest Trustees Report does predict the Social Security and Disability trust fund could run dry in 11 years resulting in a reduction in benefits but, considering the report is based on “best guess estimates” of future financial operations and economic growth, the report is not set in stone. Last year’s report, for example, predicted the end of social security by 2034 and income revenue only allowing for a payout of 80% of promised benefits. This year unexpected economic growth caused the income revenue to be higher than predicted increasing the payout to 83%. Keep in mind the Trustees Report acts as a guide to those in power and aids in their decision-making process. And the odds of Congress letting a popular program go to the wayside are slim to none because any lawmaker who does so would be risking his or her career.
The altering of retirement plans may very well be another pandemic related phenomenon like the “Great Resignation” yet just because someone wants to retire at age 62 or 67 doesn’t mean they’ll be able to. Alloy Wealth Management works with individuals who want a better understanding of their current financial situation and help achieving their financial goals. Call 800-689-3935 to speak with one of our experts regarding retirement insurance planning and distribution strategies, risk management, tax planning, and other ways to ensure you live large in retirement.