Cipher Your Social Security Check

 

“I know my Social Security,” Presidential candidate Joe Biden claimed during the 2020 Presidential debate alongside Donald Trump.  Majority of Americans expect their Social Security checks to fill out their income stream during retirement.  But how well do you know Social Security? 

 

Social Security stands on a divided floor in Congress for years between the Democrats and Republicans.  Since Republican House Speaker Newt Gingrich called for changes in Cost of Living Adjustments in American’s Social Security because of overstated inflation during Clinton Administration, our Social Security checks which many Americans see as the source of their retiring income can actually leave them on shaky grounds if Congress decides to undergo reconstructing the existing structure.  Republicans advocate for Cost of Living Adjustments which can reduce with inflation and jeopardize retirement plans for many senior citizens.

 

Hilary Clinton addresses Social Security on her website HillaryClinton.com (https://www.hillaryclinton.com/issues/social-security-and-medicare/) ensuring Americans she opposes proposals to privatize American retirement checks in stocks; also she opposes reducing Cost of Living Adjustments.  Risking Americans’ retirement checks on high-risk stocks and inflation only subject them to the volatile market ultimately binding them to unknown certainties of their future.  In fact, inflation risks are not tied to safe and secure investments but risky stock market which suffers heavy gains as well as losses.  Secure treasury bills, notes, and bonds do not face default risks and risking your retirement incomes to stocks and inflation can send the future of American seniors' retirement on a downward spiral from untimely losses.  Stock portfolios should really be in a separate account in your investment portfolio aside from your Social Security, IRA, 401K, and pension plans. 

 

Why should you care about Social Security?  Majority of American households put Social Security checks as a big part of their income stream come retiring age.  Women especially face unforeseen risks such as loss of a spouse which severely undermines their financial health.  The poverty rate for women is higher after death of their spouse leaving a huge chunk of gaping hole in retiring income.  Your retirement should be 70-85% of your current income and loss of an income earner significantly reduces women’s financial freedom.  Aside from Social Security, eligible women should take steps in investing in tax-deferred plans like Roth IRA (also tax-free), IRA, and 401K.  Women should not use social security check as 100% income in the advent of disability but look into additional disability income and long term care insurance.  Many Americans have the misconceived idea that Social Security covers disability and long-term care insurance when it only covers a small percentage of medical plans.                   

Tally up your numbers.  Take a moment to look over your Social Security Benefits every year.  Government initially set it up not as the sole source of income but to supplement your retirement benefits.  Always remember to invest in additional disability and long term care insurance which Social Security does not give full coverage.  Lastly, crunch your numbers in your Social Security Benefits.  Plan for happy retirement.