If you're a baby boomer, Social Security can't possibly provide for you in the same way it provided for your parents. That's a simple statement of fact. Even though we of the boomer generation have paid into Social Security at high rates throughout our working lives, there are simply too many of us. The money we paid in has been used to pay our parents' current benefits, and there aren't enough younger people to take care of us in the same style. That fact is critical to your retirement planning.
When I was asked to speak at a 2009 panel on The Future of Retirement Security for the Aspen Institute in Washington, D.C., I was astounded at the general belief that Social Security would provide any significant amount of retirement income, beyond mere subsistence. At the time I said: "If you believe in the Social Security Trust Fund, you must also believe in the tooth fairy!"
The future of Social Security is a hot button topic. But we can only begin to deal with the future when we face the current reality: There is no "trust fund"—only an accounting fiction. The "surpluses" in the fund that were supposed to accrue for the benefit of boomer retirement were long ago "consolidated" into the federal budget deficit. So when the government says it is running a trillion dollar deficit, that's after using up all the money that has been taken in through the Social Security payroll tax.
Don't be in denial about the severe problems facing Social ...