| The Center for Retirement Research at Boston College has released a new Issue in Brief: "Should You Buy an Annuity from Social Security?" by Steven A. Sass The brief's key findings are:
The brief is available here. |
Tuesday, June 12, 2012
New issue brief: “Should You Buy an Annuity from Social Security?”
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4 comments:
It is pretty irresponsible to suggest that anyone should liquidate retirement assets to become more dependent upon the system.
In terms of retirement planning, diversification is the primary rule to follow. You are liquidating divresification and concentrating your retirement income into a single source which has no guarantees. In fact, the system is projected to cut benefits on people as old as 63.
Joe the Economist stated it clearly; Social Security is not a diversified plan where the worker has already concentrated nearly 75% of their potential savings (10.6%) into one single entity. In fact that single entity is projected now to be unable to pay full benefits past 2033 and that year is suspect.
From an economic standpoint, Social Security should be scrapped. From an individual standpoint, the sooner you can begin collecting the better off you are. When the well is dry, it is tough to collect from.
Will you be sliced when it's time to cut off Social Security?
If you think American workers will always accept higher taxes to support Social Security, you are mistaken. At some point in time, taxes will hit a level from which they will rise no further.
We could be at that point now.
In this case, the only alternative is to cut benefits. As a worker, is it better for you to delay the fix, continuing to pay a high tax for low benefits, or would it be better to "take the money and run"?
A person can choose to support Social Security, knowing it is a loss from the start, or they can support repealing Social Security, allowing them the opportunity to save 10.6 percent of wages.
Saving 10.6 percent of wages in the very same investment as Social Security yields a benefit that is three times larger than Social Security can pay. To put it another way, you would have to lose 70 percent of your portfolio balance at retirement to reduce you to the level of a Social Security benefit.
You are playing hot potato with Social Security. Will it be your birth year for which those who are asked to pay your Social Security benefits say no?
More and more people are finding that annuities are a great investment. Now I'm going to have to spread the word about buying an annuity from social security. Thanks!
-Jeff
I was online trying to figure out if I should have someone buy my annuity because I am in need of money now. Recently I fell behind on some bills and after doing some research I found out I can sell my annuity payment for a lump sum of cash. Since I didn't know much about the subject I decided to do some more research and that's how I came across your blog post. You have been a huge help, and have educated me on the subject. Thank you for sharing this with us!
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