We are sharing the article titled, "Avoiding the Approaching Social Security "Financial Cliff" (link to the article below), which is a quick read that identifies the real problems facing policy makers regarding declining reserves that fund social security payments. This decrease in funding is commonly known as the “Financial Cliff” and to some this can bring fear regarding the possibility of reductions in their needed income. Martha Shedden does a good job of quelling the fears of many retirees or near-retirees by providing ways they can stay informed and plan so that this does not become a hinderance to them. While we may not be able to directly affect the policy controlling what is to be done about this, we are able to adjust plans accordingly to help protect your retirement.
FPS takes a conservative approach, for many clients this means that we do not include a cost-of-living adjustment on social security income for cash flow planning. Historically, FICA taxes have increased for current wage earners to help create more income for those currently receiving social security benefits and we anticipate that history may repeat itself. I encourage you to take a few minutes to read this if you find yourself having these common fears.
We are also excited to host a webinar on June 4th at 12pm via zoom where Vanguard will discuss Overcoming the Insecurity around Social Security. A day or so prior, we will be sending out the link to join the webinar.
Article: Avoiding The Approaching Social Security 'Financial Cliff'