The bill is finally coming due for Social Security.
Starting in 2020, for the first time in almost 40 years, Social Security’s costs are going to exceed income. And the gap will widen quickly every year from here, draining the program’s trust fund fast.
Where does that leave current retirees? According to government figures, current retirees will likely face a big haircut in benefits well before they die.
If you are younger than 72, the government doesn’t think it will be able to give you your full benefits.
That is the conclusion of the Social Security program’s trustees, who just issued a sobering report.
“That fact that we now can’t guarantee full benefits to current retirees is completely unacceptable, and it should be cause enough for every policy maker to rally around solutions to restore solvency to those programs,” says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
If we have to rely on policy makers coming together to solve this crisis, sadly we could be waiting for a while.
Medicare’s hospital insurance fund is expected to run out of money in just 7 years from now. By 2035 (only 16 years from now), the trust funds for both Medicare and Social Security will be gone. After that, the disability fund is expected to dry up behind them.
A big part of the shortfall is poor planning plus the reflection of inevitable changes in generational size. The baby boom retirement wave has begun to hit the program hard at a time when the generations below are fewer in number to pay into the system.
WHY ARE THESE PROGRAMS GOING BANKRUPT?
Social Security is funded only from tax revenue and interest on the trust fund.
Imagine what will happen if a serious recession hits. Plus, a depleted trust fund pays less and less interest every year.
What is the solution?
Spend more? That’ll be be tough to fund. Social Security and Medicare already gobble up 45% of government spending. If the government has to spend more to cover retirees beyond 2035, America’s economic slump worsens fast. It could increase the national debt, hurt the dollar and deal the economy a serious blow.
Spend less? A tough sell when these programs are political “third rails.” The wave of retiring baby boomers is still rising. This is a generation that has long expected to get their benefits in full, even if generations below them might not. Cutting Social Security or Medicare benefits would be extremely unpopular politically among one of America’s largest voting demographics.
What do you think America will do? Right now, public and political opinion seems to be moving inevitably towards… spend more.
While the Presidential election is still more than a year away, there are already proposals by candidates for programs to increase Medicare coverage to cover everyone in the United States.
Clearly, every current and future retiree needs to think of alternate ways to secure the long term future of their own personal retirement. We can’t trust our family’s futures on the whims of the economy and the possibility Congress might somehow fix this looming threat.
Why is a national discussion about gold breaking out at this moment?
Please read on for more expert opinions about gold and what could lie ahead.
RUSSIA LOADING UP ON GOLD IN 2019
Russia’s central bank beat its chest this week with a press release trumpeting its latest physical gold acquisitions for its reserves: nearly 2 million ounces in 2019 already!
Russia has gobbled up gold over the last ten years, and the pace has been accelerating since 2014. The country holds 18% of its central bank total reserves in the precious metal.
Russia now owns almost 70 million ounces of gold worth over $85 billion.
Why the buying spree? Analysts think that this is part of the inevitable slide of the U.S. dollar in its appeal as a reserve currency. China has particularly been aggressive in seeking to promote its own currency as a strong reserve currency option.
“Emerging market central banks have been buying gold fairly consistently since 2010 .. because central banks are looking to diversify their reserves, they are looking for safety and gold provides that to them,” says World Gold Council director of investment research Juan Carlos Artigas.
If the trend continues, this strong buying support by central banks could provide positive support to gold prices ahead.
“Investors are being led by central banks,” says Bark Melek at TD Securities. “Overall, given that gold currently makes up roughly 10% of total global reserves, there is lots of room to grow.”
READY TO PUT YOUR RETIREMENT ON THE GOLD STANDARD?
Central banks have long used physical gold as a core pillar in their national reserves and a sign of economic solidity.
What role could gold play in your retirement and your peace of mind?
Research shows that holding some gold and silver bullion in your retirement portfolio can lower volatility and increase risk adjusted returns.
Gold may not be everyone, but it could be for you. We recommend you get informed and prepared. For all seasons and all kinds of markets.
Let us help you make your move today with a Gold bullion IRA!