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A hedge for Social Security’s woes: Build your savings
A pretty big, but not so pretty, milestone will occur this year when Social Security taps into its Trust Fund to pay out benefits. This is a harbinger of what Social Security’s Trustees have been warning us about for years – eventual depletion of the $2.9 trillion reserve account so that benefits will need to be cut in 2034 (lacking any corrective action by Congress). If completely depleted, a lack of reserves in the Trust Fund would mean a benefit cut – now forecast as 21% – which means that those who depend on Social Security will need an alternative source of funds to make ends meet. The fact is that Social Security was never intended to provide more than about 40% of a person’s retirement income, with the rest made up from elsewhere, including personal savings. So how do you prevent a potential benefit cut from changing your future lifestyle? As this Motley Fool article by Maurie Backman points out, the answer is to, starting now, save the most you possibly can. Click here to read more.