Why Social Security Might Not be in Baby Boomers Retirement Plans
The goal for Social Security as it was intended from its inception in June of 1934 was to protect millions of workers from poverty in their retirement years.
Over the years many changes have taken place and Social Security is very different from the original plan.
Here 5 reasons why Baby Boomers might not be able to count on Social Security in our Retirement Plans.
1. There is no money left in Social Security’s Trust fund.
Originally the plan was for working people to voluntarily put money into an insurance plan that would be put into a government managed interest bearing Trust Fund that would be used only for paying retirement benefits.
Unfortunately, during President Lyndon Johnson’s administration, the funds were made available for use in other government programs. For years Social Security has taken in more money than it has paid out; but instead of saving this surplus, the government has spent the money and replaced it with an “IOU”, a special issue government bond to be paid back starting in 2017. No one knows at this point just where the money will come from.
2. Social Security is subject to double taxation.
Originally, the plan was to have the money paid into the program be tax deductible for income tax purposes.
Unfortunately, During the Clinton Administration, Social Security benefits became taxable. Now, you pay income tax on the money that is deducted from your paycheck that goes into Social Security. Then when you receive it, you may be taxed on all or part of your benefits if you have other income besides Social Security. You have now been taxed twice on the same money.
3. Social Security is not enough to live on.
Even if you work hard your whole life and pay into Social Security, there is a very little chance you will have enough to live comfortably in your retirement.
You may work and contribute to Social Security until the age of 70 and only receive $566 per month. Can you live on $566 per month?
4. High Social Security taxes take our retirement savings.
Social Security and Medicare taxes are 15.3% of our earned income. With inflation at an all-time high, few of us can even afford to put away anything extra for our retirement.
5. Social Security is not secure.
As we have seen in the past, the laws and rules that govern Social Security change according to who is in office at the time.
How Does Social Security Work?
Social Security Explained
So, how do we Baby Boomers solve our pending Social Security dilemma?
Start a Business that can continue to provide for you even after you retire.
What a concept, huh?
Is this a new idea for Baby Boomers to consider?
Smarter Baby Boomers have been taking this into consideration for the last decade. In 2000 there was fewer than 10% of us self-employed, but now in 2009 self-employed Baby Boomers have grown to over 26% of us.
What do those Baby Boomers know that you don’t yet know?
Owning a business is a great alternative to your current popular retirement plans. Being self-employed gives you the choice between paying into Social Security and investing in yourself. In fact, in most cases, if you stop paying into Social Security in your 50’s, you will still receive just about the same benefits as you would if you paid into it until you are 70.
Start Your Own Home Based Business
A very popular way to do this is to turn a hobby or interest into a Home Based Business. There are many ways that you can benefit when you own a business that you can’t receive ordinarily.
With your own Home Based business, you can then deduct from your taxes all of the tools and supplies that you use in your business. The room(s) you use in your home can be deducted by claiming a percentage of your rent or mortgage with its interest and taxes as well as a portion of your utilities, insurance, and even many repairs to your home. All of those things you are going to pay for whether you have a business or not and you will even pay tax on the money that you pay for them. Remember, the tax savings is net money and can be added directly to the bottom line of your retirement income!
If you own your own business, when you retire you can either have a family member take over the business, hire someone to run it for you or you can even sell it for retirement income. This way you can receive income until you die and then you can even Will the income to your heirs. What do you have with Social Security?
If you choose to represent or sell your products over the Internet, all of your Internet costs are tax deductible; including your website, online marketing costs and even your computer costs are tax deductible. The list goes on and on. By making these things tax deductible you can limit (if not eliminate) what you pay into Social Security and now invest that money back into your own business or a retirement investment or savings program of YOUR choice.
Did you want to travel in your retirement?
As you travel to visit your children and grandchildren or even take a deserved vacation, you can make the trip deductible by attending a trade show or perhaps by checking on new ideas and materials that will improve your products or service. Take that travel idea to the next level and become a Home Based Travel Representative. Yes, you can save up to 70% on your travel and write it off your taxes too.
• Can we really still expect to have a full retirement?
• Can you still depend on just your investments, savings and Social Security for our retirement plans?
• Will you need to work in your retirement to have a good quality of life you desire?
With your own Home Based Business, when you retire you can keep creating income to supplement your retirement and continue to keep those tax deductions that represent net bottom line income that most of the others will simply lose in their retirement years.
So what does retirement mean to Entrepreneurial Baby Boomer men or women who have successfully woven passion into what we do as small business owners? Do we plan on retiring when we reach the age of 65? Do we even want to?
And as pop culture tells us, 50 is the new 30 and 70 is the new 50. So why not begin a whole new chapter of our lives at 55.
With your own Home Based Business, you are in control of your own retirement destiny.
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