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Tuesday, October 4, 2016

Erosion of Entitlements? Will Social Security disappear?

Times are hard, and they are made even more difficult by the uncertainty of the unknown. There has been much discussion regarding a program taken for granted by many, Social Security, and the shaky foundation upon which it stands in the future. For people who have paid into this program for their entire lives, the thought that it may all disappear is frightening. Many retirees rely on it to support themselves in the later years of their lives.

So is Social Security going to completely disappear? Is this fact or fiction?

The truth lies somewhere in between. The real impact of the government’s shrinking cash flow is that those monthly payments may begin to decrease.  In all likelihood, Social Security will be around for years to come, albeit with diminishing returns. This does, however, create a quandary for those workers caught in the middle of the transition, who have paid a great deal into the program but might retire with fewer benefits than those before them.

What is certain is that something has to change in the government’s practices to keep Social Security alive and well. Several solutions have been proposed, such as instituting a more progressive payroll tax or raising the retirement age, but their ultimate bearing on the future of Social Security is still ambiguous. It may be advantageous to factor this potential decline in future payments into your planning process in preparation for the worst, however. 

Posted by: Patrick Carroll at 10:37 AM
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Monday, August 15, 2016

Mid-Life Money Errors

So you’ve reached a certain age in your life, probably around 40-60, and you think you know it all when it comes to your financial planning. Unfortunately, many middle-aged people fall prey to the same mistakes on a consistent basis. Following these tenets can help you to secure your assets:

Stay away from increased risk: You might fall behind in your savings. That’s OK. Just be sure to keep your portfolio consistent, as too much volatility may be a bad thing. You don’t want to lose what you’ve taken so long to build up over the years- play it safe.

Don’t just build your wealth- protect it: People all too often focus on moving their wealth up, up, up and fail to play defense with their savings. Being fiscally conservative is a great way to gradually increase your funds, while minimizing possible risk.

Prioritize your own savings over everything else: It may be tempting to start investing full-speed ahead in college funds for your children. But keep in mind that college has scholarships and financial aid- your retirement fund does not.  

Don’t assume your peak earning years are ahead: Hope is a wonderful emotion, but it is best to be realistic when considering your future income. Don’t overestimate your earnings and end up in a financial rut because of it. 

Posted by: Patrick Carroll at 11:24 AM
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