Welcome to Offshore Living Letter, Your #1 Resource for Offshore Diversification

I Can Show You How To Retire Without Social Security Checks

18 Jun
social security card and money concept

I Can Show You How To Retire Without Social Security Checks

It’s Official—Social Security Is Running Out Of Funds... Here's What You Need To Do Now

The Social Security Administration will have to begin dipping into its trust fund this year… and the fund will run dry in 16 years.

That’s the official proclamation of the report published last week.

What does this mean for folks currently receiving Social Security benefits?

They’ll be getting haircuts on their payments.

Americans who will not yet have begun to receive Social Security payouts by that time need to adjust their expectations. They’re going to receive less than they’ve been counting on.

Here’s the thing…

Anyone under the age of 50 expecting anything from Social Security is a dope.

The U.S. Social Security system was put in place in 1935 to help keep the country’s elderly from living out their days in poverty.

At the time, the average life expectancy of an American was 61 years.

The retirement age at which you could begin receiving Social Security was 65.

The ratio of workers to Social Security recipients in 1940 was 159.4 to 1. Social Security tax was 3% of wages.

The math worked all the way around.

Today the ratio of workers to recipients is 2.8 to 1… and the Social Security tax on workers is 6.2%.

That math does not work.

Americans have gone from using Social Security to keep themselves from starving in their final years to relying on monthly Social Security payments to fund the majority of their potentially 20 or 30 years of retirement.

I figured out that Social Security was a Ponzi scheme in high school when I went to work part-time for a CPA firm and was introduced to the realities of FICA. You didn’t have to think through the system very far to realize that it was unsustainable.

I knew by the age of 17 that I wasn’t going to be relying on Social Security for my retirement.

At first, I bought into the alternatives that the government set up to help provide back-up plans for the inevitable collapse of Social Security—IRAs and 401(k)s. I contributed as much as possible from an early age. The initial tax break was beneficial, but the tax-free growth of the gains was the magic bullet… and matching contributions from employers were free money.

Still, I observed, my retirement accounts weren’t growing at a rate that would ever allow me to retire with the income I anticipated needing to live the retirement lifestyle I imagined I wanted to live. Taking now-and-then breaks from television viewing to walk the dog was never my long-term plan.

How I Built My Retirement Fund

I began looking for ways to fund the lifestyle I wanted… myself.

Using bank leverage to grow wealth is another magic bullet… risky but powerful.

So, soon after I had the realization that I would never be able to build a sufficient retirement nest egg if I relied on government systems, I bought my first rental property. The year was 1995, and I was able to organize financing with a loan-to-value ratio of 98% to buy a three-flat building in Chicago.

Ah, the good ol’ days of American leverage…

The proceeds from that investment helped fund my first investments overseas… and then, early on, I made two more specific purchases overseas that allowed me to accumulate a not-inconsiderable pile of capital for a kid my age.

That was 20 years ago.

Fast-forward two decades, and I have continued to re-invest profits, property purchase after property purchase… using leverage when possible… and continuing to grow my portfolio and my nest egg.

No, I didn’t have this plan in mind when I realized at the age of 17 that nobody, including the U.S. government, was going to make my retirement possible.

At the start, the beginning and end of my plan was to take responsibility for my own future long-term. The strategy that I’ve pursued to that end evolved organically and over time.

Here’s the point for you: You need to adopt the same approach.

Probably, you’re not 17. Maybe you’re not 27… or even 47…

But I do hope that you by now have realized that Social Security is not the key to your financial security in retirement. I hope you did not need last week’s official report to drive this reality home.

I hope, too, that you’ve begun working toward your own personal-responsibility plan.

Taking control of your own retirement not only means that you are not at the mercy of the officially about-to-be-out-of-funds Social Security system…

It also means you can retire when you want rather than waiting for some arbitrary Social Security age milestone.

No matter where you are in your take-control-of-your-retirement process, my mission is to help you push that plan into overdrive.

That’s the stated agenda of my Offshore Wealth Summit taking place next month in Santo Domingo, Dominican Republic.

Lief Simon