Social Security Payments ARE ENDING (DO THIS BEFORE!)

Most of us are aware of the fact that social security is essentially bankrupt already. And just a few short years from now, by 2033, it's estimated that people will only be receiving about 79% of their promised benefits in social security. And the reason for this is because social security is essentially a Ponzi scheme, and it's also a bankrupt pension fund. And there are more people taking money out of social security these days than are putting it in. And that's how Ponzi schemes work, and eventually it ends up collapsing. Right now, about 72 and a half million people receive a social security check every month, and many of them rely solely on that income to survive. And this is the reason why you'll likely never be able to retire, because this is the retirement plan for almost everybody, guys. And if that is going bankrupt and it's going away, well, guess what? No one's going to be retiring. And this is proof that retirement as we know it, and the future of retirement, is a scam, because most people are never going to be able to save the amount of money that's going to be required to be able to retire without a social security check. In fact, I found this interesting story that talks about just that, how much money people would actually need to save if social security were to completely go away. And it's a lot more than most people are ever going to save. But before we get into how much you will need in retirement if social security goes away, let's go over just some high level facts so people can understand the status of the American household right now. The immediate household income in America is about $80,000. The average household income is $114,000. That is a lot more. However, that is the average. And you got to remember, the much higher income households tend to drive up the averages. This is not a reflection of what a lot of people make. The personal savings rate in this country is at 4.6%, which is still pretty close to the all time lows that we saw during the past couple of years. The average 401k balance is sitting at about $127,000 right now, which is up 13% from 2023. But the median retirement savings is $82,000. So now that we know those numbers more or less, let's take a look at how much money people are actually going to need if social security goes away. Americans need to save at least $2 million without a social security check. Think about that. You need $2 million, guys, in retirement. And I just told you that the average 401k balance as of right now is $127,000. And that's the good number because the median is only $82,000. That's pretty far away from $2 million, as far as I can tell. So I think it's safe to say that somebody in my generation, I'm going to be 38 in a few weeks from now. I think it's safe to say that somebody in my age is probably never going to see a social security check in my lifetime, which means I'm being robbed every single year that I have to pay in social security tax because I will never probably see that money ever again, unlike people who are collecting it now. And I'm not saying this to argue or be bitter against people who are receiving the social security check or anything like that. It's not their fault that the system is corrupt and is a failure. But the reason I bring it up is more to highlight just how much money people need. And the numbers are staggering, guys. According to a lot of investment advisors right now, they're saying the average person or the average household is going to need about $2 to $3 million by the time they're retired just to be able to maintain a middle-class lifestyle without social security benefits. And that's about double or triple what most financial advisors typically recommend with social security in place. So you see, having that social security safety net in retirement makes a humongous difference. And what investment and retirement advisors recommend you do in order to make sure you don't run out of money once you're retired. One investment advisor was looking at a recent client who had saved $1.2 million and they thought that she was set. But that wasn't the case, because after running the numbers without social security, they realized that she would need at least another $800,000 to maintain her current lifestyle. And that turned out to be an extra $40,000 a year she would need to save just to be able to maintain her current lifestyle in retirement. Guys, who is this realistic for? Only people who are extremely wealthy that make a lot of money are going to be able to ever achieve this sort of retirement goal. This is completely unrealistic for the average household that's earning $80,000 a year right now. How do you sock away an extra $40,000 a year if you're only making $80,000, you know? So now the current advice based on if this were to happen, which most likely it probably is going to happen, is people should be setting aside, wait till you hear this, 25 to 30 percent of your income, which is a huge increase from the 15 percent recommendation before. So this is why basically everybody watching this video is never going to be able to retire, guys. Raise your hand out there if you're saving 25 to 30 percent of your income. I would assume it's probably only about 10 percent of people watching who are doing this. Number one, mainly because most people can't even afford to do that. And even if you can, a lot of people don't actually save that kind of money anyways. So as of right now, today, of filming this video at the beginning of 2025, the average social security benefit is $1,976 per month. And in order to replace that on your own, you would need to have about four to five hundred thousand dollars saved up in retirement. This advisor says also that he's working with a few 35-year-olds, very close to my age, who said that they're increasing their monthly savings from $750 a month to $2,000 a month to compensate. So congratulations to anybody who's actually able to do that because that is a massive increase in savings. And if you can still get by and live your life while saving more than double what you were just a month ago, that is amazing and good for you. Even me personally, I've been working with a financial advisor recently who has been looking at things for me. My retirement number, which I've disclosed here on the channel before, I always thought would be about $5 million. That's what I wanted to retire with in order to be able to, you know, kind of live the same lifestyle I'm living right now. But after running the numbers, guess what? It turns out it's actually double that because of what? Inflation. So you actually need to save way more than you even think if you account for that. And I'm not even sure how many financial advisors are actually even taking this into consideration because even somebody like me that is, you know, up on this topic and talks about these things a lot and is always looking at stuff like this, I was even surprised to see that it would be that much. Now, do I really need to save $10 million to retire? No, I don't. But you just might not be able to spend as much in retirement as you're hoping for because you give them a number and you say, hey, this is how much I'd like to be able to spend each year in retirement. And what does that look like for me? And part of the reason my number is so high is because number one, I would like to have extra money in retirement, not be scrounging for pennies. I would like to be able to spend kind of as much as I would like to. But also I plan on retiring early. I'm not going to be waiting till I'm 65 most likely to retire. So my number is a lot bigger than a lot of other people. And I'm not even sure if it's realistic, but hey, it gives you something to shoot for. And if you're somebody who's kind of confused about stuff like this, I would highly recommend you start working with a financial advisor if you're like serious about looking at saving for retirement and coming up with a roadmap to getting there. Because number one, it's really hard to do this stuff on your own, even if you are financially savvy. But also you might get a reality check like me and see that you might actually need more in retirement than you initially thought. And the sooner you find that out, then the harder you can work and the more money you can put towards your retirement savings right now. So if you wait until you're 50 years old to find out you're going to need double what you originally thought, you don't have as many years to catch up and you might find yourself working longer than you anticipated. I think one of the best ways for people to replace their social security income in the future, rather than maybe saving up more for retirement, could end up being that you invest your money in real estate and end up becoming a landlord. But the question then is, do you want to deal with that in old age and retirement? Sure, you can have property managers dealing with a lot of it and you don't have to be involved in too much of the day-to-day operations. But it is an extra stressor nonetheless that can come with some big financial problems and liabilities you might not be ready for in retirement. So that's kind of the biggest downside. This is something that a lot of people are doing. People are trying to generate an extra two, three, four thousand dollars a month now investing in real estate and using that as one of the avenues to sort of replace the social security check in retirement. But other things you can do to increase your retirement savings are things like focusing on building multiple streams of income, whatever that looks like for you, not just relying on one. You can also cut expenses like I've talked about a million times on this channel. You know this guy here, this young guy, 35 years old, was actually able to cut down $1,500 off of his monthly expenses just by relocating to a lower cost of living area. So that is pretty impressive. I mean that's probably where most of that extra savings is coming from that he's able to contribute towards his retirement just by living somewhere cheaper right now. And you know what, if we get lucky and somehow social security doesn't come crashing and burning down to the ground and somehow there's still some money left in there by the time we get to retirement age, then that'll just be a little bonus for you. But I can pretty much guarantee you it's not going to be the number that's being promised and the number that people are getting today. And just ask anyone receiving social security today, they'll tell you it's not enough. And if they're not getting enough today, imagine how much not enough is going to be in the future, guys. It's not going to be enough. Because what you really don't want to end up like is like this person. This guy here is 65 years old, has zero savings, and he can't afford to retire, but he really doesn't want to work until he dies. Well that's like going on a road trip, driving in the wrong direction for hundreds of miles, and finally realizing that you went the wrong way and you got to turn around and go back, but you don't have any gas. You don't have any money to buy more. Same sort of thing. Not a good situation to be in. According to AARP, they found out that 20% of Americans age 50 and over have no retirement savings at all. And the worst part is people in this position are not alone. There's a lot of people who are in the same boat right now. And unfortunately if you find yourself in this situation there's only a few levers you can pull and this is it. Right away they tell you, well you're going to have your social security, which is about you know $1,970 a month on average right now, so you'll have that, which is not taxed. So that's 23 grand annually that you're going to get. Well yeah, if you're retiring right now I guess. They say, well you can also increase your monthly benefit by delaying your claim. If you wait till you're 70 years old to claim social security, you can get about an 8% increase. You can also do what this young guy did and downsize your home and that will give you extra income because now you're not having to pay as much to maintain this larger home. Also if you're able to cash out some of that equity when you sell the home, that'll give you a little bit extra money saved as well, assuming you even own a home. However, I would be skeptical to say that somebody who is 65 and has nothing saved for retirement owns their home especially outright. Probably not. You know, what do you do if you're 65 and no retirement savings and you're a renter guys? You don't have that option. And that brings me right to my next point because one of the things they tell people to do in this position as well, you can look into getting a reverse mortgage. They'll tell you that a reverse mortgage is good because it lets you tap into your home equity to supplement your income and pay off any debts or just use it for retirement. But there are certain clauses and conditions that come with getting a reverse mortgage guys. It is not free money. You are required to maintain insurance on the home, which can be very expensive depending on where you live. You are required to keep the home in a certain condition. And if you don't do it, the bank can potentially foreclose on you. And so there are strings attached to doing a reverse mortgage. It is not all sunshine and rainbows. A lot of senior citizens are sold into doing a reverse mortgage because they find themselves in a situation like this where they don't have very many other options. They don't really have much saved. But the one thing they did do right is they bought that home 30 or 40 years ago. That's appreciated tremendously in value and can now use that in retirement. But there are people out there who survive completely on Social Security. I've heard from a few of you over the years as I've been making these videos. And it turns out about 23% of retirees today survive completely on Social Security alone. And 60% of them say they feel financially comfortable. So it is doable if you made other good decisions in life, like having a paid off home, don't have any debt in retirement, keep your cost of living low, things like that, living within your means. If you follow those important budgeting standards, then it is possible to do. Although you're not living rich off the hog, but you also are taken care of. But this is exactly why so many younger people today need to be taking a look at this because you're probably not going to have that safety net in retirement. And really, the only other lever you have to pull if you're in this situation is to push yourself to work a few more years and save as much money as you can during those few extra years that you're going to work. If you're 65 and you wait till you're 70 to retire instead, well, then at least you can try to catch up on some retirement savings and put as much away as possible. They say, well, if you start contributing to a 401k, $500 monthly contribution over five years, even with just a modest 4% return could add up to about an extra $32,500, which isn't a lot of money, but anything helps whenever you're in this situation. And I've seen a lot of comments lately that are from people saying, Hey, Michael, you know, I watch your channel and because of your channel and some of the other channels I follow on YouTube, I am getting myself out of debt, or I've gotten myself completely out of debt. I've also started saving for retirement. I'm starting to do things smarter now, and it's improved my life tremendously. And every time I hear one of those comments, it just makes me think like, man, that is so awesome that people are actually hearing this. The message is getting through and it's actually changing your life out there. So congratulations to you for doing that. And I'm happy to be a part of it and provide this service to you for free. Now, one other trap that people fall into, especially when they get old and they're in their retired years is sometimes you'll have this relationship dynamic with the couple where either the husband or the wife handles all of the money, all of the bills or the whole financial side of the relationship while the other person doesn't. And then, you know, 35, 40 years goes by and then one of them passes away and suddenly the other one is left with the burden trying to like sift through the ashes, essentially trying to figure out what to do next. And this is not a good position to be in. And I recommend that anybody in any relationship today needs to be involved in the finances. You don't have to do everything, but at least know what's going on, know how to pay the bills, know how much money comes in and how much goes out. What are your sources of income as a couple? As of a 2022 survey, it said that only one third of couples share financial responsibilities with their spouse, which means that 67% of couples, there's only one person who takes on all the money managing responsibilities. That is a scary number, guys, because imagine even if there is no death, what if there's a divorce? What if the other person, you know, decides to resent you and is bitter and, you know, wants to take advantage of you and crush your life? They can easily do that. So as much as you might love and trust your partner, I think it's important to stay in control of your own finances and know what's going on with your household finances. And this is a video I kind of want to do coming up because I saw this quiz out there that most Americans are failing right now because only about 57% of U.S. adults are actually financially literate. Literate means can you read and write. When we're talking about finances, it means can you add and subtract? Do you know how to manage debt and interests and the household finances? That's over 40% of Americans that don't know how to do this stuff, guys. It's bad. And financial literacy isn't exactly something that we're taught in school. In fact, right now, there's only 27 states that require students take a personal financial course before graduating high school. Just as recently as 2022, it was only 15 states. And let's face it, just taking one financial course in high school isn't going to be a game changer. Yeah, it will give you a little bit of basic knowledge. It's better than nothing. But this is something that children should be taught from a young age. So what all this means is you need to take control of the wheel. You need to be the one who is in charge of your own financial future. Because if you don't do it, even if someone else is technically doing it for you, if anything were to happen to that person, where does that leave you? Okay, that's pretty much how you have to look at it. And like I said, it doesn't mean you have to do everything. You don't have to be involved in every single thing from the day-to-day finances, but at least know the basics. Know how to pay the bills of the house. Know where your money's being kept. Know how much income is coming in and from where and how much is going out. Those are just the basics that you should know. If you don't know that stuff, start knowing it. Don't end up like one of these statistics, guys. So if you enjoyed this video, make sure you are subscribed to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here and I'll see you in the next one.