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The American retirement system is slipping. And this could make it harder to have the retirement you've worked so hard for.
Americans are up against some pretty tough challenges. The Social Security Trust Fund is running out of money. Healthcare costs keep going up. Inflation has run high for too long and yesterday's lower prices aren't coming back. Higher taxes are almost assured at this point.
Now a study shared by the Wall Street Journal, Forbes, and Fox Business proves this is all taking its toll.
In a new ranking of the world's retirement systems, the U.S. scored a C+, falling further behind the Netherlands, Australia and Sweden. The U.S. came in 22nd out of 47 countries … with a slightly lower score than a year ago.
–Wall Street Journal
That's right, America's retirement system just got a downgrade. You can still take action to secure your retirement today, but it's critical to understand what we're all up against.
Social Security is on life support
Social Security, once considered as a lifeline for retirement income, is teetering on the edge of insolvency. With an aging population and fewer people entering the workforce, the program is no longer sustainable — at least in its current form.
The most glaring issue is the impending shortfall in the Social Security Trust Fund. The Congressional Budget Office estimates the trust fund will run out of money by 2032 — less than nine years from now. If the government doesn't come to the rescue soon, retirees could see their benefits slashed by as much as 20%, according to the American Academy of Actuaries.
Even with higher-than-average cost-of-living adjustments over the last few years, Social Security benefits have still lost 40% of their buying power since 2000, according to data published by the Senior Citizens League, a nonpartisan group. So over time, Social Security has become increasingly unreliable for retirees.
Higher taxes take more of your savings
As the government continues to spend more and more money, the U.S. national debt continues to climb. The Treasury Department shows it has surpassed a record-breaking $33 trillion.
So what do you get when you have record-high national debt coupled with 40-year-low federal income tax rates? You get a perfect recipe for the government to raise taxes.
Here's the scary part for retirees. All that money you put into your traditional IRA or 401k was pre-tax. This means the IRS is ready to take its share when you start to pull it out. Higher taxes could make this a particularly devastating blow if you're relying on this money in retirement.
These higher taxes won't just impact withdrawals from your IRA and 401K, either. They could also impact your Social Security benefits and other investment income.
Inflation is driving up everyday living expenses
Inflation may be down from its recent peak, but that doesn't mean Americans are out of the woods.
Inflation is often called the "silent killer of retirement," because even when it is low (between 1% and 2%), your purchasing power can be cut in half in just a handful of years.
Not only that, those high prices don't go away. The prices on everyday items today are still way above what they were a few short years ago. As a result, retirees are left with significantly less purchasing power to cover their basic necessities and healthcare costs.
The skyrocketing cost of healthcare
Many people believe that Medicare will cover all of their healthcare costs in retirement.
Unfortunately, that's simply not true. While Medicare will cover some of your medical bills, you will still have to come out of pocket for significant expenses for dental, hearing, vision, long-term care and more.
So, even with Medicare, healthcare will likely be one of your largest expenses in retirement.
According to some of the latest estimates shared by HealthView Services, a typical 65-year-old couple should expect to spend a total of $673,587 on healthcare expenses in retirement. That's a staggering number today. But with healthcare expenses growing much faster than the rate of inflation, imagine what this number could be in 10, 20, or 30 years from now.
Take matters into your own hands
Here's the thing. You can't just throw in the towel and give up. The American retirement system may only get a C+, but you can still go for the A by taking matters into your own hands.
There's a lot you can do, starting with maximizing every benefit available to you.
One of the most important things B.O.S.S. advisors do with their clients is help them get the maximum amount of Social Security benefits they deserve and are entitled to. By filing in the right way, at the right time, for their specific situation.
96% of Americans get this wrong — and as a result, they lose out on an average of $111,000 in Social Security income, according to Forbes.
That's why B.O.S.S. wants to offer you a free, customized B.O.S.S. Social Security Analysis.
This free analysis pinpoints exactly how and when you should file for Social Security which could help you get the most income from your benefits. It also considers the impact on your taxes, spousal benefits, Medicare premiums, and more.
For many Americans, this is the single most important tool that could help ensure you get the most net income from your benefits.
The strategies we use are best suited for families who have saved more than $200,000 for retirement and have not yet filed for Social Security.
To learn how you could wring every nickel out of your benefits, schedule your free analysis by clicking HERE.
B.O.S.S. advisors have helped thousands of families get the most out of their Social Security benefits, and they're confident they can help you too.
About the authors: Ryan Thacker and Tyson Thacker are the president and CEO of B.O.S.S. Retirement Solutions. They are a five-time winner of Utah's 'Best of State' award and have six offices located throughout the Wasatch Front.
This is for illustrative purposes only, results may vary. Advisory services offered through B.O.S.S. Retirement Advisors, an SEC Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Marketing materials provided by Infinity Marketing Services.
