Treat Social Security as End-of-Life Insurance

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First things first: let’s kill this notion that my fellow Generation Xers started spouting years ago about how Social Security benefits will not be around when they get to retirement age. It’s nonsense. I don’t factor Social Security into my retirement planning, but not because I expect those funds to be dried up (recipients will receive just 75 percent of their benefits starting in 2033 if the current fund erosion isn’t addressed).

I don’t factor Social Security into my retirement planning because I view the benefits as an insurance policy. That’s not some revolutionary idea, either. Social Security was established as a social insurance program in the 1930s after the 1929 stock market crash had essentially erased the savings of many senior citizens, dropping them into poverty. There have been various changes to the Social Security program over the last 80 years, leading to where we currently stand. The basics are a 6.2 percent tax rate for employees on income under $118,500 and inflation-adjusted benefits based on the last 35 years of salary.