Don’t rely on Social Security

by Miles Streicek, Contributor

Many of us young people don’t really think about eventually growing old.

It’s not that we aren’t thinking about our future — that’s why we’re in college — but we only think about our future careers and hardly about what comes after.

It’s time we change this mindset and start investing in our future.

Traditionally, Americans have prioritized getting a good steady job or career, buying a nice house with a white picket fence and when it comes time to retire, living off of the Social Security they paid into throughout their working life, along with some meager savings.

But the world is changing.

We can’t rely on Social Security.the system is broken.

We need to take matters into our own hands.

If you ask most government officials, especially Democrats, about how Social Security works, you’ll most likely hear about a massive trust fund everyone pays into — one in which the elderly, after working their whole lives, get payments out of it.

In addition to this, you probably also hear even if no deposits were added to the fund, it would still be able to support the nation’s elderly for several years to come.

The trouble is none of this is actually true.

The Social Security trust fund has been empty for over 50 years.

The elderly, right now, are living off of current payments into the system, which is why many Conservatives call it a “Ponzi Scheme.”

Worse yet, current payments are expected to no longer match what elderly folks get in monthly checks within the next several years.

This means each check will be smaller and people will have to wait until they are even older to start reaping the benefits they are legally and morally entitled to.

This is simply an unfortunate reality.

Millennials and Generation Z-ers would be foolish to think there will be any Social Security for any of us.

So, what will we do when we’re old and have no support from Social Security? Unfortunately, there is no answer yet. This means many of us will suffer in our old age.

But if we start planning now, many of us can avoid this fate.

The key is, if you can afford to put aside a small amount of money each paycheck and invest it, do it.

Don’t put it in a savings account, where it will grow slowly and eventually lose its value from inflation.

Investing in stable stocks which pay a dividend or bonds which pay out a fixed rate is the way to go.

Most students and young people don’t know much about stocks or bonds, but rest assured, it’s a lot easier than one might think.

In the age of the internet, all information anyone needs to start is out there.

In order to start, one needs to make an account with one of many stock brokerages.

Personally, I use one called Charles Schwab.

But there are many options.

Some often opt, when first starting out, to use a beginner friendly app called Robinhood, which doesn’t charge a commission for buying stocks.

Do the research and find which one suits your needs the best.

The reason stocks are so much better than a regular savings account is when buying a stock, you are buying a portion of a company.

If that company does well, you profit. 

If it doesn’t, you lose money.

But every year, the economy grows, meaning people are buying more, and as a result, businesses grow.

As long as this long-standing trend holds up, most companies will grow year after year.

So, on average, every ten years you invest in the stock market, your money doubles, while savings accounts average just a 21 percent return in that same amount of time.

Think about it this way. Suppose you invest in a company called Proctor and Gamble.

Chances are, you’ve heard of their products, which include Bounty paper towels, Charmin diapers, Crest toothpaste, Gillette razors and more.

Every year, the U.S. population and the economy grows, so every year more and more of these essential products will be sold, and even if the economy goes bad, people will still need to buy these items out of necessity.

On top of the inevitably steady rising stock value, Proctor and Gamble pays a dividend, or a payment to shareholders, of 2.87 dollars per share, which averages a return of 3.19 percent interest.

Just the dividend is worth more than the interest from a savings account.

So ultimately the choice is ours. We can begin the journey toward a financially stable future now or we can rely on the slim chance Social Security will still be around.

Choose wisely.

Miles Streicek is a sophomore studying finance.

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