Unsubscribe

Confirm you would like to unsubscribe from this list

You have unsaved changes on the page. Would you like to save them?

Remove strategy

Confirm you would like to remove this strategy from your list
Give Us a Call

Fund Operations
800.847.0200

FIND ANOTHER CONTACT
Someone raises their hand to answer a question
Build Your Business

Planning for Inadequate Social Security Benefits

Thornburg Investment Management
1 Jun 2018
2 min read
Sorry, but you do not have permission to view this content.

In this year’s annual report, the Trustees of Social Security and Medicare informed us that for the first time since 1982 the amount the programs are paying out will exceed the revenue they’re taking in.

While $3 trillion sounds like a big number for an emergency fund, many experts are concerned. Why? The answer is simple: at a ratio of 2.8 to 1 the number of workers paying into the system relative to the beneficiaries receiving benefits is the lowest it’s ever been.

On the surface, a ratio of 2.8 to 1 should produce enough revenue to cover the benefits that are paid to recipients. Unfortunately, that’s not the case. The problem is the trend. And when you look at the trend over time, you can see that the ratio has declined dramatically. Here’s a snapshot of how the ratio has changed over the years:

 

Year Number paying in for each SS recipient
1940 15.9
1955 8.6
1965 4.0
2009 3.0
2017 2.8

Obviously, the outlook isn’t positive. The declining ratio, the demand being put on the system by retirees who are living longer and the high number of individuals claiming disability benefits have experts projecting that both programs will run out of money in the future. They forecast that the retirement program will use up its reserves by 2034 and the disability fund will run out of money in 2032.

Why is the decline of the number paying in for each Social Security recipient important?

Clients who are concerned about the future of Social Security are often the same people who are worried they will outlive their income. They’re looking for an advisor who can provide them with solutions that address their concerns. They want to feel as though they’re getting the type of advice that will protect them if Social Security isn’t available when the time comes for them to collect their fair share. You want to demonstrate that your experience and expertise have prepared you to help these individuals prepare for the possibility that Social Security won’t be there for them.

Thornburg’s Road of Retirement program gives you a comprehensive solution you can recommend to clients who are concerned about the future of Social Security and are afraid they will outlive their income. The program includes:

  • A system for managing the monthly income clients receive from pensions, annuities, retirement programs and investments
  • A blueprint for building a longevity-oriented investment portfolio
  • The rationale for including dividend paying stocks in long-term investment portfolios, and
  • The case for using an Endowment Spending Policy to determine monthly spending

Contact us to learn more about Thornburg’s Road of Retirement. It’s the one program that will make you look like a genius the next time your client questions the future of Social Security or expresses concern that they will outlive their income.

 

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.
Subscribe

More Insights

Hot balloon header image

How We Invest: Active by Nature. Disciplined by Design.

Discover Thornburg’s investment philosophy: a research-driven, high-conviction approach rooted in disciplined, long-term thinking—focused on uncovering overlooked opportunities and building resilient portfolios.
Press Release from Thornburg with a branded megaphone image.

Thornburg Income Builder Opportunities Trust Announces Distribution

Thornburg Income Builder Opportunities Trust (NASDAQ: TBLD) announced its monthly distribution.
Looking along desert towards the business district
Markets & Economy

Investment Perspectives from the Road: The UAE

Our investment professionals travel the world to evaluate global markets and unearth the most optimal ideas. Josh Rubin recently visited the United Arab Emirates (UAE), and here are his perspectives.
3D miniature Downtown of Los Angeles in spot light. Real Estate concept. 3D rendering.
Fixed Income

Investor Update: A Potential Reprieve for the Municipal Bond Tax Exemption

We provide an update on the developments surrounding the municipal bond tax exemption in a fast-moving environment.
Thornburg Investment Management courtyard

Thornburg Investment Income Builder Fund – 2nd Quarter Update 2025

When searching for income, investors tend to focus solely on dividends and distributions from U.S.-based firms. However, a global approach may yield better results.
Man looks out at a beautiful view from a conference room
Markets & Economy

FOMC Update: Fiscal Challenges Taking a Back Seat to Geopolitical Risks

Christian Hoffmann, CFA, Head of Fixed Income, shares his perspective on the Fed’s stance and the potential impact of monetary policy.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.