A perfect storm is an expression that describes an event with a rare combination of circumstances that aggravates a situation drastically. In this case, a perfect storm is brewing with social security and the increasing number of people using the system. This thought came to me as I recently spent some time with my dad, who moved in to a “senior citizen center”. As I looked around and talked to some of the residents, some sobering thoughts occurred to me on the upcoming economic horizon. According to Statistic Brain Research Institute, the average length of retirement is 18 years. As I spent some time in the lobby with my dad I saw this to be true. There were some residents of 30+ years there in their 90s, showing that this average length of 18 years was not only accurate, but more than likely going to increase in the future. No doubt Americans are living longer, creating the first element for the “Perfect Storm”.

Element 2- The average life span for an American man is 76 years (women 81). If the average retirement age is 63, these figures will put a previously unseen strain on the social security system. With life expectancy increasing the situation is only getting worse.

Element 3- There are approximately 6,000 people a day reaching retirement age. This number in combination with people spending a longer time in retirement shows potential for a dramatic draw on the system.

Element 4- Retirement saving. According to Statistic Brain Research Institute 36% of Americans are relying completely on social security for retirement. If 36% are reliant on the system and they are going to live for the average 18 years on the system, it doesn’t take a math genius to project the economic challenges it will cause.

It is our view that the answer to these issues does not rest in Washington, it rests with us as individuals to understand and find solutions that work for us as individuals. This again shows how essential personal financial planning is to ensuring a comfortable retirement. With these problems on the horizon it pays to have your own plan in place rather than relying on this overburdened system.

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