Reflections by H.Wilson
January-February 2011
To our dear clients and friends,
As we have experienced the credit crisis, massive lay-offs, drops in investment portfolios and company insolvencies, the majority of Americans recognize we are also experiencing a serious crisis and risks in relying on Social Security as the anchor for providing an ongoing retirement benefit as for the second straight year, Social Security Beneftis will not receive a cost of livng Adjustment (COLA)
Although the decision to freeze benefits in 2011 is not directly related to the social insurance program of projected funding shortfalls, consider it a lesson and potentially an uncertain future. American's who rely on Social Security as their sole source of retirement just found out they will not receive an anticipated benefit increase, and they learned this just a few short months in advance and too late for them to do anything about this.
Going forward, it might be prudent to expect more surprises from Social Security. The program already is a fragile situation and has deteriorated further in the face of wide spread unemployment and a significant reduction in the payroll tax receipts that fund the governments largest program. The Congressional Budget Office now expects that in 2010, Social Security outlay will exceed tax revenues for the first time since Social Security was amended in 1981. The CBO also projects that the Social Security's so called trust -funds , which are actually IOU's issued by congress for borrowing Social Security surplus revenues in years in the past, will be exhausted by 2039 if changes are not made to current system.
Imagine what your own financial situation might look like if Social Security announced shortly before your anticipated retirement date, that because of underfunding, it would cut benefits and raise elgibility requriements.
It seems clear, that at the very least, Social Security will not be able to survive without making some adjustments. The good news is if you are already aware of the likelihood, so it might be wise to prepare for your own retirement assumption that Social Security wont be able to provide these same level of benefits that you currenty might be expecting. It is far better to make an assumption and begin seeking ways to offset the potential shortfall, than wait until it is too late to do anything about it.
It is crystal clear to those of us working in the financial services industry, that the US Governnment has now made you the one in complete charge and accountable of what your financial and retirement picture is going to look like.
"Our team of financial advisors would like to meet with you an show you different options that could create confidence at time of distribution or at time of retirement, that the appropriate steps have been taken for consistent and timely income and a planned financial strategy"
I would like to discuss with you your retirement and wealth accumulation strategies you have in place, or programs that would be suitable to help you reach your financial goals.
In these trying and challenging financial times we would like to offer you the opportunity to meet with us and allow us to show you how we can be strategic partners and your trusted advisor regarding financial and retirement goals.
I look forward in future meetings and communciations.
Warm regards,
Harold Wilson
Investment Advisor Representative.
|
