In case you missed it last week, a story from the NY Times pointed-out that, for the first time, Social Security Administration will pay-out more in benefits than it takes in as revenue. This tipping-point was not expected to be reached until 2016, but the system—like many other human services programs—has been hit by the perfect storm of more people filing for benefits, and fewer receipts from payroll withholding, both attributable to the recent recession.
Implications: Whether social security would “still be around by the time I’m ready to use it” has long been fodder for conversation among many baby boomers and younger generations. The recession seems to have accelerated the pivotal moment what that hypothetical conversation becomes a reality that must be faced. The largest generation in U.S. history continues to move toward retirement age like a pig through a python, and simple math suggests the program will need a major overhaul, both in terms of revenue generated and expectations of those receiving payouts.
It is not my intent to dabble into a political or fiscal policy debate, here. Only to point-out that if you cater to seniors, or if you provide financial services or advice… significant market shifts are going to happen sooner than most people expected. Consumer trends are less scary if you know they’re coming. Can your company, in any way, help would-be retirees "hedge their social security bet?"
Mike Anderson
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