Social Security Future: For many years, Social Security has helped millions of retired people manage their daily expenses. It’s been a big support system. But now, experts are warning that the future of these benefits might not be as strong as it once was.
A recent report from the Social Security Board of Trustees says that the trust funds which support the program might run out by 2034. That doesn’t mean payments will completely stop, but it does mean that the government might only be able to pay about 80% of the promised money unless Congress does something about it.
Social Security Trust Funds to Run Short by 2034, One Year Earlier Than Expected
If you’re still in your 40s or 50s or even younger, this could be a big problem later. You may have been thinking you’d get full benefits, but that might not happen. That’s why experts are saying people should not depend only on Social Security anymore. It’s time to think about other ways to save and grow money for retirement.
Social Security Future: What other ways can Help you Prepare?
401(k) plan
One of the strongest ways to grow savings for retirement is through a 401(k) plan. If your workplace offers this, and they match part of your contribution, that match is free money. Not taking the full match means you might lose out on thousands of dollars over the years.
IRA
Another great option is opening an IRA. Traditional IRAs let your money grow without taxes until you take it out. Roth IRAs are different your money grows tax-free, and you don’t pay tax when you withdraw it in retirement. Which one you pick depends on how much you earn and your tax situation.
Stock market
Besides retirement accounts, some people put their money in the stock market. Index funds or ETFs (Exchange Traded Funds) help spread out risk and can earn more money in the long run than just saving it in a regular bank account. Stocks do go up and down, but over a long time, they’ve usually grown faster than inflation.
Real estate
Real estate is another way to grow money. You could buy a house or apartment to rent out or invest in REITs, which let you earn from property without owning it directly. As housing demand increases in many places, real estate can be a smart long-term choice.
Small businesses
These days, side jobs and small businesses are easier to start than ever before. Thanks to online platforms and apps, people can earn extra money in their free time. That extra income can be saved or invested to help in the future, especially if Social Security gives you less than you expected.
Health Savings Accounts
Health Savings Accounts (HSAs) are also worth looking at. If your health plan has a high deductible, you can put pre-tax money into an HSA. The money grows without taxes and can be used for medical costs tax-free. After age 65, you can even use it for other expenses, though you’ll pay regular taxes on non-medical withdrawals.
Budget Making
Another helpful step is to manage your money better. Making a budget, spending less, and paying off debt means you can save more for later. The less money you send toward loans and credit cards, the more you can keep for retirement.
