America is Financially Screwed (How To Save Yourself)
Published: 2024-12-02
Status:
Available
|
Analyzed
Published: 2024-12-02
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Multiple articles have warned about Social Security running out of funds, implying a future inability to pay promised benefits without intervention.
"over the last few years there have been numerous articles all saying the exact same warning that Social Security is running out that there's not going to be enough money left over to pay you how much you're owed and if something isn't done right now we're all F"
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The Social Security fund is projected to be depleted by 2033 if no changes are made.
"as of now it's said that without any changes the Social Security fund is slated to be drained by 2033"
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Without changes, Social Security beneficiaries could face an automatic 21% cut in their monthly checks.
"which would result in an automatic 21% cut to beneficiaries monthly checks regardless of marital or income status"
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By 2034, older individuals are predicted to outnumber children, leading to a reduced worker-to-retiree ratio, impacting Social Security funding.
"older people are expected to outnumber children for the first time in US history by 2034 there will be fewer workers to support each retiree in the future"
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Urgent action is needed to prevent the depletion of Social Security reserves.
"unless something is done very quickly Social Security reserves are going to be running out"
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Future Social Security benefits are likely to be reduced by 21-25%.
"Social Security benefits are going to be reduced by the time all of us are older most likely to the tune of 21 to 25%"
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Social Security reserves will be depleted within 8 years from the video's publication date (2024-12-02), meaning by approximately 2032.
"Social Security reserves are set to be completely depleted in the next 8 years"
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The retirement age for Social Security may be increased, potentially to 72, to reduce payouts.
"they increase the retirement age so that they pay out less money for example instead of taking retirement at 67 maybe they force you to take it at 72 instead"
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The Social Security fund is projected to be drained by 2033, leading to a 21% cut in benefits if no changes are made.
"without any changes the Social Security fund is slated to be drained by 2033 which would result in an automatic 21% cut to beneficiaries monthly checks"
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Increased taxes may be implemented to cover the shortfall in Social Security funding.
"the government could just tax you more to be able to pay for Social Security that's running out"
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By 2034, the United States is expected to have more older individuals than children.
"older people are expected to outnumber children for the first time in US history by 2034"
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In 1983, a Social Security deficit was addressed by raising the full retirement age from 65 to 67.
"the last time Social Security faced a reserve deficit was back in 1983 and it was resolved through an agreement that raised the full retirement age from 65 to 67"
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Social Security benefits are predicted to be reduced by 21% to 25% for future beneficiaries.
"Social Security benefits are going to be reduced by the time all of us are older most likely to the tune of 21 to 25%"
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There's a proposal to increase Social Security taxes for individuals earning over $400,000 annually.
"a recent proposal would increase social security taxes on those making over $400,000 a year"
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To ensure 75 years of full Social Security benefits, immediate options include a 13% benefit reduction, a tax rate increase to 14.4%, or a combination.
"we'd either need an immediate reduction in benefits of about 13% or an immediate increase in the combined Peril tax rate to 14.4% or some combination of these changes to allow full payment of the scheduled benefits for the next 75 years"
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The retirement age for Social Security could be increased, potentially from 67 to 72, to reduce payouts.
"they increase the retirement age so that they pay out less money for example instead of taking retirement at 67 maybe they force you to take it at 72 instead"
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Budgeting and tracking expenses are crucial for personal financial management.
"it's why it's so important to budget and track your expenses as soon as possible"
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Understanding spending habits and creating a budget are key to financial advantage, as few people do this effectively.
"if there's one thing that's going to dramatically put you ahead of everyone else it's this that's because so few people actually take the time to understand where they spend their money even fewer people make a reasonable budget"
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A 14.4% combined payroll tax rate might be required to maintain Social Security benefits for the next 75 years.
"an immediate increase in the combined Peril tax rate to 14.4%"
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The income threshold for Social Security taxes is likely to increase from its current $168,000.
"you're only required to pay social security taxes on the first $168,000 of income so anything above that amount is completely exempt for now because I have a feeling if eventually they're going to bump that number higher"
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The target for retirement income replacement is set at the US median income of $50,000 per year.
"assume that you want to replace the median income here in the United States of $50,000 a year"
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To maintain the solvency of Social Security, future tax increases and a delayed retirement age are anticipated.
"I have a feeling that in order to keep Social Security afloat there's going to be higher taxes in the future and most likely a delayed retirement age"
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To sustain a 4% annual withdrawal from an index fund throughout retirement, $1.25 million is needed.
"if you invest in a broad Index Fund you could withdraw 4% annually throughout retirement without running out of money so that would mean that you need 1,200 $1,500,000"
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To replace a median US income of $50,000 annually in retirement, an investment of $1.25 million is needed, based on a 4% withdrawal rate.
"if you want to replace the median income here in the United States of $50,000 a year generally speaking the rule of thumb here is that if you invest in a broad Index Fund you could withdraw 4% annually throughout retirement without running out of money so that would mean that you need 1,200 $150,000"
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The retirement savings target is adjusted to $1.5 million to account for life's uncertainties.
"let's bump that up to $1.5 million"
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A target retirement savings of $1.5 million is recommended to account for unforeseen life events.
"let's bump that up to $1.5 million"
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A 20-year-old investing $416/month ($5,000/year) can accumulate over $1.5 million by age 60.
"if you're 20 years old you're going to need to invest $416 a month or $5,000 a year and by the time you're 60 years old you'll have just over $1.5 million"
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A 20-year-old needs to invest $416 per month ($5,000 annually) to reach $1.5 million by age 60.
"if you're 20 years old you're going to need to invest $416 a month or $5,000 a year and by the time you're 60 years old you'll have just over $1.5 million"
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A 30-year-old needs to invest $940/month ($1,400/year) to reach $1.5 million by age 60.
"if you wait to start at 30 years old you're going to need to invest $940 a month or $1,400 a year to reach that same $1.5 Million by the age of 60"
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A 30-year-old needs to invest $940 per month ($1,400 annually) to reach $1.5 million by age 60.
"if you wait to start at 30 years old you're going to need to invest $940 a month or $1,400 a year to reach that same $1.5 Million by the age of 60"
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A 40-year-old must save $2,300/month ($28,000/year) to reach $1.5 million by age 60.
"if you start at 40 years old you'll need to save $2,300 a month or $28,000 a year just to be able to reach that very same amount"
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A 40-year-old needs to save $2,300 per month ($28,000 annually) to reach $1.5 million by age 60.
"if you start at 40 years old you'll need to save $2,300 a month or $28,000 a year just to be able to reach that very same amount"
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Social Security is not a direct investment return but rather supports the broader economy by aiding those with insufficient income.
"Social Security is not meant to be a onetoone return your contributions end up supporting the greater function of our economy for the people who aren't fortunate enough to make an enough to be able to contribute enough"
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Social Security acts as a form of insurance, particularly for individuals who lack the financial literacy or discipline to manage their own retirement savings effectively.
"Social Security is a bit the same way sure you could get a higher return investing the difference yourself but let's be real most people have absolutely no idea how to manage their own money half of Americans have absolutely nothing saved for retirement whatsoever"
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Social Security functions more like insurance, where individuals might pay more than they receive, but it provides a crucial safety net when needed.
"it's more similar to Insurance where yeah you're probably going to pay out more than you receive but if you need it you're going to be really glad it's there"
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Social Security is not expected to be eliminated in the near future.
"no I don't think it's going away anytime soon"
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Social Security funds are invested in safe, stable assets, yielding returns around inflation plus a small percentage, ensuring availability for beneficiaries.
"all of your money is invested in safe stable assets that are guaranteed to be there when you need them and they really just earn inflation plus maybe an extra percent"
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The future of Social Security will likely involve either increased taxes or a later retirement age for recipients.
"the realistic outcome is that overtime taxes either have to go up or you end up taking social security at a later age and retiring later than expected"
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Social Security is unlikely to disappear; future adjustments will likely involve increased taxes or a later retirement age.
"I don't think it's going away anytime soon and the realistic outcome is that overtime taxes either have to go up or you end up taking social security at a later age and retiring later than expected"
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A recommended personal financial strategy includes living below one's means, consistent investing, and income growth through skill development over decades.
"it would be much better to live below your means invest consistently learn new skills to increase your income and then do that consistently over decades"
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