New retirement

In recent months the country has been discussed, such as health care reform. Draft, rumors and scare tactics to play every day in the headlines of our news sources. It's hard to figure out what happened at the end.

One consequence has been a sharp drop in Medicare have something in $ 300 - $ 400 billion range. Usually this was pitched as a reduction of waste, fraud and payment to suppliers. The savings are expected to alleged financing of the reform of health care.

The Medicare begins to get nervous. You wonder why the waste and fraud has not decreased. They reduce payments to doctors and hospitals suspicious. You are confident that this implies a lower availability of services or additional costs imposed on them. Pensioners must be sensitive to increases their costs, since most are on a fixed income. More money must be considered here anywhere else in the household.

Another problem that is hidden by the health care debate on what happened with Social Security. By his own assessment of the government essentially bankrupt Medicare. Social Security is not far behind. Pensioners pensions now and in the vicinity must ask themselves whether they would survive a reduction in social benefits. The question today can help us better prepare for tomorrow. Today's difficult economic times will affect the financial stability of the fund.

The loss of jobs, old suffering disabilities linked to a lack of jobs for people over 62 years has sent a flood of newly unemployed to take up their social benefits. This is all very well, because they are entitled to these benefits. The problem with this country is a profitable fund itself

Applications for social security has increased 23% from last year and has forced the increase deficit spending to fund the 10 billion USD in 2010 and 9 billion USD in 2011. Deficit before the bulk of baby boomers retire. What happens when 80 million of them to jump on this system vary? Even now recognize managers, the fund will run out within 28 years. This means that there is no money at some point a healthy 65 years in the period. That approach retirement in the near future should consider back-up plans.

So, if we would start to worry? Too many of us to plan for the old retirement. We need a new way of thinking that the new pension begins to define. When we look at the social benefits, we must evaluate how important these benefits are to preserve our lifestyle and our dignity. Social policy, look at the percentage of the proceeds from the fund are reimbursed. This is misleading for those of us at Ground Zero that takes days to make-to-day decisions.

Instead, we should see how much of our monthly social security costs. This is the first step is to determine how much we depend on this income. Next, if our service is reduced, the amount we have to get back out of the ordinary savings, our ability to maintain our lifestyle. Together these will determine how vulnerable we are.

One way to begin the test is to calculate your Social Security Vulnerability Index (SSVI). For example, if you are $ 2000 per month for life and you will benefit costs $ 1000 per month, to replace 50% (1000/2000)

If we lose a part of our services, we have the difference from our savings.
As a stretch, we are taking our benefits reduced by half. This leads to $ 500 profit per month. We now have an extra $ 500 from our savings per month or $ 6,000 per year. We now have to figure out how to create a large percentage of our savings this new retreat. If we save $ 100.000, we must go back now, another 6% of our savings.

Now we have two factors together. Social Security for 50% of monthly expenditure and if it is reduced by half, we are a further 6% per annum in order to attract savings. The pull-down 6% multiplied by 100, is the combined measure of the vulnerability factor of 30% (.5 * 6). We compare it to a scale where 0 means you have to be placed in Social Security is such a retrospective to 1 of social security for all your receipts and you have no savings.

If the number under 30, you probably reduced profits will survive. Thirty to sixty is the time to worry and over 60 is time to pray.

It's time, attention, given the promises that may change in salary. Benefit reduction is in the air. Look before you leap into retirement.