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What The Heck Is Going On?

| July 07, 2022

Like many of you I woke up to news that the current administration is planning on giving the Pension Guaranty Corporation $90 billion of our money to shore up 200 private sector union plans.  Irrespective of how you feel about unions, this is nothing more than a politician trying to secure votes with our money (political pork).  I don't have any particular axe to grind with unions, in years past I was a member of the Teamsters and I worked for the railroad when I was in college.  Many of my immediate family members were card carrying union members.

The problem that I have is the 2021 Social Security Trustee's Report.  The report states that in 2034, the reserves will be depleted and after 2034 only 75% of the benefits will be paid out.  This is a benefit that every American, regardless of their political party affiliation, has paid into.  If we are going to give away tax money, let's do it to help every American.  Let's put politics aside and put that money into the trust fund reserves!

I know there will be many that say the government has raided that trust fund, they should pay it back.  The government never borrowed or took the money, that's a blog for another day.  There are many tools that can be used to shore up the trust fund, none of which any politician likes to do (raising taxes, raising retirement age) and have that on their voting record.  Since using the aforementioned tools aren't a winning strategy when it comes to elections, this issue keeps getting put off.  But if we are going to give money away to shore up pensions, why don't we start with Social Security first?

We do comprehensive financial and retirement planning.  In every plan, we see the role that social security plays in enabling our clients live out their dreams in retirement.  Most of our clients would have to significantly scale back their lifestyle in retirement without social security and some wouldn't even be able to retire for a long, long time.  We understand and employ strategies that provide our clients with the best social security benefit options for their particular plan.  We know the critical role that social security plays in retirement.

Elections are coming up in November, I hope you remember this when you cast your vote.  At the very least, take your 401(k) statement to help remind you.


Mike Mickels is the President of CochranMickels Retirement Specialists and an avid sporting clay competitor. CochranMickels Retirement Specialists provides personalized planning and investment services to individuals approaching and in retirement. They also provide retirement and benefits training to Federal employees.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc, a Registered Investment Advisor. CochranMickels and Cambridge are not affiliated.