Tax Expert’s Advice: Don’t Count on Social Security
BRENTWOOD, Tenn., July 1, 2011 — According to a poll taken earlier this year, 77 percent of voters think Social Security is in danger. Fewer Americans, however, approve of increasing the retirement age. Voters were split on permitting people to invest their Social Security taxes into personal retirement accounts.
Tax expert Dr. Friday, aka “The Tax Doctor,” falls into the camp of doubters. “I don’t look to the government to be there for me; I don’t think anyone our age (30s-40s) should,” says Dr. Friday.
The good news, she says, is that “it’s never too late to start saving. The key is to find retirement plans with immediate tax benefits.” She recommends a disciplined savings plan, and her site, DrFriday.com, has an online guide to determine how much one should put away each month.
Dr. Friday outlines steps for retirement savings:
- Get out of debt so you can live on less than you make and actually save.
- Start saving once you have no high-interest credit cards/loans to pay off.
- Open a money market account and keep three to six months of living expenses in it for emergencies.
- Max out one or in some cases two of the following – IRA, Roth IRA, Simplified Employee Pension Plan (SEP), 401(k) or 403(b).
Dr. Friday’s advice is sound, considering proposals to cut Social Security benefits. The American Association of Retired Persons (AARP), the lobby for older Americans, has been considered one of the leading opponents of cuts. However, the group recently indicated it was open to modest reductions in benefits for future recipients.
Darrell Payne, a public affairs specialist with the Social Security Administration, recently was interviewed by Dr. Friday and co-host Hank Parrott on the “Retirement Report” on Nashville’s Channel 5+. When asked about the solvency of Social Security, he said, “We’ll have enough money to last until 2037.”
“Social Security was designed after the Great Depression when people didn’t have any money,” says Dr. Friday. “It wasn’t designed to be your sole support for retirement.”
For more information on Social Security, visit http://www.ssa.gov. For more information on Dr. Friday’s financial services – including tax returns, retirement planning and business accounting – visit http://www.drfriday.com.