Financial expert Chris Hogan hosts the Prager University short “Social Security Won’t Give You Security,” in which he warns that, like any other entitlement program, social security will soon collapse under its own bureaucratic weight.
“If you’re counting on Social Security to finance your retirement, you’re in for a big surprise . . . and not the good kind,” Hogan says.
Hogan warns that social security is going broke and even if that were not the case, the program would still not have the funds to cover every citizen eligible.
Hogan explains, “Let’s look at these two reasons in a little more detail, and then I’ll propose a solution.” He continues, “Social Security is going broke. When this government program was set up in 1935, the average life expectancy was 60. But you couldn’t collect your first check until you reached 65. In other words, most people didn’t live long enough to receive Social Security. And most of those who did, didn’t collect it for very long. Today, the average lifespan is 79. So now, most people do live long enough to receive Social Security — for 10, or 20, or even 30 years.”
Hogan adds, “Here’s another important piece of information: When the program started, the ratio between worker and retiree was 159 to 1. That means for every one person drawing benefits, 159 were paying in. Today the ratio is 2.8 to 1. Get that? We’ve gone from 159 workers supporting every retired person to fewer than three workers supporting every retiree. And it’s going down.”
Despite social security seemingly collapsing in on itself, Hogan sees a solution.
“Get on a budget,” he advises. “I don’t care if you’re 55 or 25. I don’t care if you’re making $400,000 a year or $40,000 a year. You need to have a plan for your money. I love motivational speaker John Maxwell’s line that ‘a budget is simply telling your money where to go instead of wondering where it went.’”
Watch the video here.