Latest news with #Levy-Lambert
Yahoo
04-05-2025
- Business
- Yahoo
Should Gen X Really Be Worried About the State of Social Security? Experts Weigh In
Every week there seems to be new chatter about the future and fate of Social Security. For Gen Xers, who are the next in line to retire, this can cause serious anxiety about whether or not America's safety net will be there when they're ready to take it. Find Out: Read Next: Experts explained whether Gen Xers should really be worried about the state of Social Security. There is an uncomfortable truth about Social Security that people may not like to hear, according to Krisstin Petersmarck, National Social Security Advisor (NSSA) and investment advisor representative at New Horizon Retirement Solutions. 'People think that since they paid into the system they are entitled to benefits in retirement. Unfortunately, this simply is not accurate. The money you paid into the system while you are working benefits people who are receiving their Social Security benefit.' Learn More: Because of the structure of the current funding system for Social Security benefits, if it isn't overhauled in some way through policy moves, Petersmarck warned there is a real risk that Gen X recipients will see a reduction in their Social Security benefits. 'The largest factor affecting the Social Security system is that there are more workers leaving the workforce and claiming benefits than there are workers entering the workforce and paying into the system,' she explained. Additionally, wage growth has not keptup with inflation in recent years, according to Sara Levy-Lambert, head of operations at Thus, less money has been coming into the program through payroll taxes. 'These pressures are exacerbated by lengthening life expectancies, which has meant that more retirees are drawing benefits for longer lengths of time,' Levy-Lambert added. Experts disagree on the likelihood of Gen Xers getting their full benefits. Petersmarck expects that it is 'realistic' for Gen X to expect to receive their full benefits at the currently scheduled retirement age. However, Kevin Thompson, a CFP with 91 Capital Group LLC, said, 'The reduction [in benefits] is absolutely real if there is no significant change in the current funding.' Currently, the Social Security Trust could become insolvent by 2033 or 2034, which could mean a significant reduction in Social Security benefits for beneficiaries moving forward. The federal government could also raise the retirement age, forcing Gen Xers and those who come after them to work longer or save more. Another possibility would be to roll back cost of living adjustments (COLAs), Levy-Lambert said. This might 'also tamp down the growth in benefits over time, particularly if inflation continues running ahead of adjustments.' The most realistic reform to the Social Security system is raising taxes, both Petersmarck and Thompson agreed. 'A higher wage base on the taxable Social Security amount seems to be the only answer that could quickly resolve this issue,' Thompson said 'But the current administration does not seem too likely to implement that and are doing their best to take more money out of the system than they want to put into it.' The Social Security Fairness Act is one such contributor that will inevitably take more money out of the system. With the risk of Social Security benefits reduction, it may be a good idea to save more money now, Petersmarck said. 'Consider maxing out your 401(k) contributions, IRA contributions and investment accounts you fund with after-tax dollars.' Try not to rely on Social Security benefits as your sole source of income in retirement, she added. Your plan should provide income from other sources where you have saved. Fortunately, the IRS has increased the amounts you can save in these various buckets so take advantage of them, she urged. Putting your money into assets that appreciate over time — like a home, stocks or mutual funds — may also help provide a hedge against the projected deficit in Social Security benefits, according to Levy-Lambert. 'It is also a good idea for Gen Xers to stress-test financial plans as if those benefits were less after they retire. For example, planning for a buffer by tucking away some more money could offer more security if the worst happens,' she said. If you are a Schedule C-filing business of any kind, you may have an advantage, Thompson said, because you can implement some tax-saving strategies. Consult with a tax professional to see your options, he said. At the end of the day, the best bet is to plan for living on fewer Social Security benefits while hoping for the best. More From GOBankingRates 6 Used Luxury SUVs That Are a Good Investment for Retirees How Far $750K Plus Social Security Goes in Retirement in Every US Region 7 Overpriced Grocery Items Frugal People Should Quit Buying in 2025 12 SUVs With the Most Reliable Engines Sources Krisstin Petersmarck, New Horizon Retirement Solutions Sara Levy-Lambert, Kevin Thompson, 9i Capital Group This article originally appeared on Should Gen X Really Be Worried About the State of Social Security? Experts Weigh In
Yahoo
24-04-2025
- Business
- Yahoo
7 Things To Do With Your Money If Tariffs Are Making Your Lifestyle Harder To Afford
If the tariffs that President Donald Trump has promised on many of the country's trade partners go into effect, many goods and services will likely become more expensive. For some Americans, their lifestyles may become harder to afford. Learn More: Read Next: Experts recommended some money moves to make to adjust to a high-tariff environment. If your everyday costs are rising due to tariffs, it's important to track your expenses because tariffs are probably not affecting all your purchases in the same way, according to Aaron Razon, a personal finance expert at Coupon Snake. Tracking will enable you to identify the specific items and categories that are the most affected by the tariffs, and show where cutbacks may be necessary, he added. Another step is to segment your spending into 'fixed,' 'variable' and 'postponable' categories, according to Sara Levy-Lambert, head of growth at Awning. She explained, 'I once rewrote my own household budget this way, during a 2018 spike in fuel and import prices, and discovered that we were able to defer almost 15% of monthly outgoings without noticing the difference.' Find Out: You don't have to abandon everything you purchase, but it is a good idea to anticipate what will immediately get more expensive. The areas of household budgets that will likely be hardest hit by tariff-related inflation are household goods, clothing and textiles, food and beverages and electronics, Razon said. So the best way consumers can adjust their spending habits without sacrificing their quality of life is to consider cost-effective alternatives for these items. Consumers could look to buy secondhand or refurbished items on places like Facebook Marketplace, local 'Buy Nothing' groups and consignment stores, Levy-Lambert said. And of course, you'll save money by making certain lifestyle adjustments like cooking at home as opposed to dining out, Razon pointed out. Another option is to 'lean into domestically produced substitutes, which might now be roughly equivalent in price due to the tariffs on foreign products,' Levy-Lambert said. These products may also become more affordable over time. Otherwise, if you were planning to purchase a big-ticket item like a car, a major appliance or sports equipment, delay your purchase until tariffs drop or cheaper alternatives come around, Razon said. If you're encountering economic strain that's tied to tariffs, you may want to revisit your saving and investing strategies, Razon said, moving anything that's invested in risky or volatile ways to assets that are more stable. However, Levy-Lambert recommended that if your investments are relatively stable, don't make any 'dramatic changes' based on tariffs. 'If your budget is so tight that you are relying on high-interest debt, then yes, reallocating from low-yield savings to pay off that debt may be beneficial,' she said. Most retirement accounts average out over time. While it can be frustrating to have to give up an aspect of your lifestyle due to financial strain, you might be able to keep some of the enjoyable parts by negotiating bills and finding better deals. Most folks have no idea how negotiable their 'fixed' expenses are, Levy-Lambert said. Internet, insurance, cellphone plans, even gym memberships often have retention departments that can offer you better rates. 'A client of mine called her cable company recently to downgrade a plan and was offered a 20% discount, simply for asking. Surviving economically necessitates negotiating,' she said. If you're overwhelmed by where to even start making changes, Levy-Lambert suggested using 'a goal-stacking approach.' 'Focus with intensity on one priority, such as credit card debt, and automate small contributions to the others. Even $25 a month deposited in a high-yield savings account helps keep the momentum up, she said, because when things are tight, 'momentum counts more than magnitude.' Lastly, a lifestyle adjustment may follow more easily when you first make a mindset shift. When the cost of living keeps creeping up, one mindset shift that may help people stay financially focused is putting your energy into that which you can control, Razon said, 'things like their spending habits, savings strategy and budget.' Additionally, Levy-Lambert recommended changing 'a scarcity mentality into resourcefulness.' This can mean that instead of thinking about what you can't afford, think instead about your options, such as bartering, DIY, community support and habit swapping. 'As I often remind people, adaptability is the real currency of resilience. When you no longer expect life to remain the same and implement systems that thrive under pressure, you regain control, even amid rising prices,' she said. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban: Trump's Tariffs Will Affect This Class of People the Most 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth How To Get the Most Value From Your Costco Membership in 2025 How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on 7 Things To Do With Your Money If Tariffs Are Making Your Lifestyle Harder To Afford Sign in to access your portfolio
