The Social Security Challenge

The Social Security Challenge

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  Your future. Madeeasier.® LIFE INSURANCE We the people.... Charting a New CourseBOLD
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  T HOSE THREE WORDSthat begin the Preamble to the nation’s Constitution set a tone for an experiment in government that has endured to this day. The words convey that we are all in this together. Then and now….and as we head to tomorrow. We live in a nation that has grown, by most standards, to be the most powerful and prosperous on earth, yet still with its better days ahead. From great advances in medical science and healthcare, to various social nets that seek to provide some measure of relief for those less fortunate, from a military that protects us abroad to a domestic infrastructure of roads, highways, bridges and tunnels that keeps us and our goods moving every day, we are fortunate to live in the U.S. Yes, we are reminded on a daily basis we can do better. And we are aware that the success of this country has not come without challenges. Inherent in those are a series of financial challenges that one could argue are the price of success. And with good reason. Because advances in healthcare have led to people living longer, which has put greater strain on our social nets, which has put pressure on the government’s ability to remain fiscally sound… …Which ultimately affects your ability to plan for a sound financial future for you and yours. Let us take a look at some of the nation’s financial challenges – some of the realities we face – and offer some initial thoughts as to how you can better plan for a future that includes a retirement you deserve.
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  The realities we TheHealthcare Challenge Advances in medical research and technology have helped to create one of the world’s most modern healthcare systems. As the dialogue for how to pay for it all plays across the front pages of our newspapers and over the network airwaves, one thing is certain: as the chart notes, we will pay more and more for our healthcare costs. $0 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 $5,000 $10,000 $15,000 $20,000 $4,208 $11,759 $4,575 $5,026 $5,434 $5,875 $6,297 $6,724 $7,187 $7,682 $8,199 $8,659 $9,140 $9,648 $10,192 $10,755 $11,250 Yearly Health Care Costs in Retirement Retirement Health Care Expenses by Age http://www.hvsfinancial.com/2011/02/calculate-your-health-care-costs-in-retirement The Longevity Challenge As a result of our medical advances, we are, as a nation, living longer. And more power to us. So long as we remember that with a longer life comes the responsibility to pay for it. Are we really living longer? The attached chart proves the point. Will that continue? We surely hope so. Here is where we stand at this point in history. 80% 70% 60% 50% 40% 30% 20% 10% 0% 50-54 55-59 Age 60-65 72% 67% 51% Young Boomers Most Concerned About Medical Costs in Retirement Source: Health Care Expenses and Retirement Income: How Escalating Costs Impact Retirement Savings,” IRI # of People 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 1950 2010 Projected in 2050 2,300 80,000 600,000 people Chance of living to age 100 has gone up dramatically. What are the chances you can afford to live to 100? Source: U.S. Census Bureau. February 2012 More people are living to 100 Christian Mortensen (1882-1998, 115 years, 252 days): the oldest man. Jeanne Calment (1875–1997, 122 years, 164 days): the oldest woman. Citation: Disabled World News - Information on life span including health physical and diet factors that may increase human life expectancy in the future: http://www.disabled-world.com/fitness/longevity/#ixzz2HgWCpuxR Bronze Age and Iron Age Classical Rome Medieval Britain Early 20th Century 2010 World Average 2012 US Average 26 28 30 31 67 78 Life Expectancy Changes
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  face. For agent/registered representativeuse only. Not for public distribution. The Social Security Challenge If we are living longer it stands to reason we are spending more on Social Security, our most powerful national social net. This is not the forum for a discussion on what to do about Social Security. But it is simply a fact that the Social Security we know needs some fixes to remain solvent long into the future. A chief reason for the challenge is there will be fewer payers into the system down the road. The Federal Budget Challenge And so we are left with our ballooning federal budget and record deficits. Over time, decisions are made about the budget that ultimately affect your life today and tomorrow. Do we need to raise or lower taxes? How do we best provide for the safety of our citizens? What about our social nets? The answers to these questions are, of course, outside the scope of this piece…outside the scope of planning for your financial future. What is in your scope? What can you control? Read on. $100 $50 $0 -$50 -$100 -$150 -$200 -$250 -$300 -$350 1987 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Billions of Dollars (2011) Surplus Deficit 2010: $48.9 billion deficit 2035: $344 billion deficit18 3638 heritage.org 35% 30% 25% 20% 15% 10% 5% 0% PercentageofGDP 2012 2025 2030 2035 203720202015 Entitlements and Interest Driving Future Spending Surge 2025: 18.5% Tax Revenue, Historical Average (1959-2008): 18.1% 23.4% 35.7% Medicare Medicaid, CHIP, Obamacare Social Security Net Interest All Other Source: Congressional Budget Office, 2012 Long-Term Budget Outlook, Alternative Fiscal Scenario, June 5, 2012, http://www.cbo.gov/publication/43288 (accessed June 5, 2012). Federal Spending by the Numbers 2012 heritage.org $300 $0 -$300 -$600 -$900 -$1,200 -1,500 1987 The Federal Budget Is Recording Chronic Deficits 1980 1990 2010 2020 2030 2000 Sources: Office of Management and Budget, Budget of the U.S. Government, FY 2013: Historical Tables, Table 1.1, February 2012, http://www.whitehouse.gov/omb/budget/Historicals (accessedAugust 8, 2012), and Congressional Budget Office, An update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, Alternative Fiscal Scenario, August 22, 2012, http://www.cbo.gov/publication/43543 (accessedAugust 23, 2012). Federal Spending by the Numbers 2012 heritage.org In Billions of Inflation-Adjusted Dollars (2012) 2000: $307 billion 2022: -$1.14 trillion 2009: -$1.48 trillion 2010: -$1.34 trillion 2011: -$1.32 trillion 2012: -$1.13 trillion 6 5 4 3 2 1 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 4.9 3.6 3.1 3.3 3.3 2.8 2.4 1.9 1.9 1.9 1.8 1.8 1.7 The number of workers for each Social Security beneficiary fell from 4.9 in 1960 to 2.8 in 2010 (Congressional Budget Office) CBO projects that by 2035 there will be 1.9 workers for each Social Security beneficiary
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  The Challenge tothe Challenges Faced with these challenges, millions of Americans the past few years have followed this financial strategy: “duck and cover.” That works well inside a boxing ring. Not so much when planning for a future that starts with a retirement you deserve. Others call the strategy “going broke safely,” which loosely translated means keeping a significant portion of your retirement money in “safe” investments such as certificates of deposit and money market funds. While they are “safe” from market forces their value will erode over time against the hidden forces of taxes and inflation. As of 12/21/12 the aggregate rate on a one-year CD stood at 0.71%.* *Bankrate.com That is a long road to retirement. You need to avoid: n Short-term decisions that lead to long-term financial mediocrity. n Retirement that leaves you wanting for more while living on less. n Planning that accounts for the expected while ignoring the potential for the unexpected. Accumulate and Protect By year-end 2011, millions of individuals owned a life insurance policy or annuity product or were covered by one or more employee benefits offered through one of the ING U.S. family of companies. The ING Life Companies have some thoughts on how you can better plan for that retirement you deserve while knowing that the unexpected too often rears its ugly head. Review the ideas with your financial professional. Ask good questions. Learn as much as you can. Then you will be better equipped to manage the financial realities we all face and the financial challenges we all need to overcome. Better equipped with the potential to build supplemental retirement income and having the means to protect it. It’s time for you to chart that bold new course.
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  Not Insured ByAnyFederal GovernmentAgencyNot FDIC/NCUA Insured Not Bank GuaranteedNotA Deposit OfA Bank May LoseValue 166193 05/24/2013 Life insurance products issued by ReliaStar Life Insurance Company (Minneapolis,MN),ReliaStar Life Insurance Company of NewYork (Woodbury,NY) and Security Life of Denver Insurance Company (Denver,CO)Within the state of NewYork,only ReliaStar Life Insurance Company of NewYork is admitted and its products issued.All are members of the ING U.S.family of companies. ©2013 ING North America Insurance Corporation CN1224-6728-1214 About ING U.S. ING U.S. (NYSE: VOYA), which plans to rebrand in the future as Voya Financial, serves the financial needs of approximately 13 million individual and institutional customers with a comprehensive array of retirement, investment and insurance products and services, including retirement plans, IRA rollovers and transfers, stable value, institutional investment management, mutual funds, alternative investments, life insurance, employee benefits, fixed and indexed annuities and financial planning. Our dedicated workforce of more than 7,000 employees is focused on ING U.S.’s mission to guide Americans on their journey to greater retirement readiness and to make a secure financial future possible — one person, one family and one institution at a time. ING U.S.’s vision is to be America’s Retirement CompanyTM . For more information, visit http://ing.us.