Much has been said about the eventual demise of the Social Security System. Let me start by saying Social Security does not provide “security.” Face the facts, the government has mismanaged this “retirement” Ponzi plan for years and years. Senators and congressmen are long on talk, quick to spend and most are short on any kind of financial or long-term planning good sense. Thankfully, I don’t have to trust in them.

Psalm 20:7 (ESV) – “Some trust in chariots and some in horses, but we trust in the name of the Lord our God.

Nevertheless, as much as I question the “investment” I made with my mandatory contributions to this Ponzi scheme, if Social Security continues, it is a valuable component in one’s overall retirement income so long as you live.

I elected to start drawing Social Security income before my “full retirement age.” The reasons were three-fold:

  1. Social Security income helps us avoid spending our retirement assets, allowing them to grow tax-deferred or tax-free (ROTH.)
  2. I am far more confident in my ability to manage the money than I am in the government’s management of the funds.
  3. The folks that designed Social Security know that the system is set up to pay you the same regardless of your longevity. On the S.S. web page application, it tells you that based on life expectancy tables your net total income will be the same no matter when you start collecting.

Over my lifetime of work, the total amount “invested” in Social Security taxes was $265,260. This included my “contribution” and the amount contributed by my employer. I started working in 1969 and stopped in 2013, so my ROI (Return on Investment) from SS is, at best, very poor. If I live until I am 74 years old I might break even. Talk about a poor return on the investment.

One thing you may want to consider before delaying benefits is quality of life beyond a certain age. There comes a time when your body is weak and sometimes your mind is as well. Even if you don’t need the money, perhaps you can find ways to invest it in others.

Also, don’t be a fool. You should take the time to think about your current savings and investing strategy. Do you have a written investment plan? A written investment plan is like a recipe card for a rising yeast dough. What you put into your investment bread and how long you let it rise might be a significant factor in your “retirement” success and your ability to bless others along your journey.

One final thought. – Investments will often continue to pay after you die. Care about your loved ones. Social Security stops paying when you heart stops beating. Until it does, your real rate of return is likely to be unsatisfactory compared to other long-run alternatives.

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