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How Does Social Security Fit into Your Retirement Plan?

You’ve probably heard that the future of Social Security may be uncertain – it is a frequent topic of discussion among those currently working and Washington lawmakers alike. However, you may not have the full picture of how Social Security fits into your retirement plan and how you’ll need to supplement it in order to have the retirement lifestyle you want. Let’s look at some of the important facts about Social Security.

The Social Security Act was signed in 1935 to ensure that working Americans would have an income to support them in retirement.1 As you probably know, it does this by deducting tax from most salaried income in the United States. What you may not be aware of is its changing role. At the time of its inception, the Social Security System was well equipped to pay out all of its beneficiaries, as there were over a hundred people paying into the system for every person receiving benefits. Over eighty years later, due to ever-increasing life expectancies and earlier retirements, there are less than three.2 As a result, the system appears to be unsustainable and may change drastically or disappear altogether in the near future.

Let’s say that you plan on retiring soon, though, and can reasonably count on having a Social Security check for the duration of your retirement. Will it be enough to sustain your lifestyle? The odds are that it won’t. To further examine what this practically looks like, let’s look at an expense everyone has to deal with: food.

Assume for a moment you spend roughly $15 per day on food. If you live for another twenty years after retiring, you’ll need to spend a total of $109,500 over the course of that time to keep the refrigerator stocked. That may not sound like a lot until you look at the average Social Security payout in 2019: about $1,461 per month for retired workers.3 Over the course of twenty years, that will pay you a total of $350,640. That means you’d be spending slightly over one-third of your income (31.2%) just to eat! Once you factor in the myriad of other expense that everyday life carries – rent or property tax, insurance, healthcare, and leisure activities, just to name a few – it becomes increasingly clear that Social Security may not be enough for the average person to remain independent in their retirement years.

Fortunately, there are several ways you can supplement your retirement income with some forethought and planning. Index Universal Life policies (IULs) provide robust life insurance benefits while also building guaranteed cash value that features investment-like growth. While this cash value participates in the growth of the market, it cannot lose value during market turndowns.

To learn more about IULs, including information regarding sales and marketing training, contact Simplicity Life today at 800.921.3100.



[1] Social Security Act Contents

[2] Social Security History Statistics

[3] Social Security Basic Facts








The information contained herein is for general information purposes only. Simplicity Life is not to be held responsible for the accuracy of this information. Neither Simplicity Life nor its employees provide tax or legal advice. As with all matters of a tax or legal nature, your clients should consult their own tax or legal counsel for advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax adviser.

The information, statistics, and opinions reported herein are from sources believed to be reliable. However, Simplicity Life and the author of this blog do not guarantee the truth, accuracy, and reliability of any source, fact and/or statistic cited and no do necessarily agree with any opinions expressed by such sources.

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