Retirement Planning

Tammy Flanagan | National Institute of Transition Planning | April 13, 2017 | 0 Comments

Will Social Security Last?

401kcalculator.org

Nancy A. Berryhill, acting commissioner of Social Security, recently announced that April is National Social Security Month. During this month, the Social Security Administration is highlighting five steps to financial security:

Now might be a good time to gain a better understanding of how Social Security fits into your retirement plan, whether you are covered under the Civil Service Retirement System or the Federal Employees Retirement System.

The long-term future of Social Security has been a matter of political debate for years. Recently, Rep. John Larson, D-Conn., re-introduced the Social Security 2100 Act, which aims to provide increased benefits to low- and mid-wage workers while extending the solvency of the program by making the wealthy pay more into the system.

Specifically, the bill would make eight significant changes to Social Security:

In a letter to Rep. Larson, the chief actuary of Social Security said passage of the bill would mean that the combined Social Security Trust Fund would be fully solvent for 75 years.

Currently, Social Security retirement benefits replace about 40 percent of pre-retirement earnings for the average worker. That’s a good foundation, but most people also will need other sources of income in retirement such as the FERS or CSRS retirement benefit and savings in the Thrift Savings Plan or other retirement accounts. Most federal employees covered under FERS contribute to a TSP account, but nearly a third of U.S. workers overall have no money at all set aside for retirement — let alone enough to live comfortably.

If you’re interested in learning more about Social Security, I’ll be presenting a webinar on April 20 for the NARFE Federal Benefits Institute called “Social Security Simplified.” It’s free for NARFE members.

Photo: 401kcalculator.org

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