Over at the Wall Street Journal, Brett Arends is looking at the possible repercussions the extension of the Bush-era Tax Cuts will have on an nation full of aging baby boomers. With the new Tax Deal expected to tack another $900 billion on to the national debt, the US Government may have to make big slashes in spending to keep its head above water. And whenever the words “big” and “spending” come up, the conversation immediately turns to Social Security.
If Social Security were axed, retiring Americans wanting to ensure that they won’t outlive their savings would have to purchase their own annual income annuities from private insurers to replace the monthly check they would typically receive from Uncle Sam.
A cool $128,000 can buy a 66-year-old man an annuity with a yearly income of $10,000. However, “only a third [of workers] have saved as much as $50,000,” which, if put into an annuity, would provide them with a salary of $54 a week.
Arends’s advice? Save up. “Starting about 20 years ago.”