The anxiety of many over the future of Social Security is on the rise and is causing numerous seniors to consider owning gold as an option to the dilemma. Due in part to a serious reduction of anticipated funding of the Social Security Trust Fund and the inverse proportion of a growing number of retirees and the shrinking number of working contributors to the fund, has the elderly worried indeed.
There are many shades and degrees of solutions that have been offered to bring us back onto solid footing and they generally break down into two camps, openly difficult and secretly dishonest.
The openly difficult ones involve direct tax increases. Difficult because nobody likes them. They range from increasing the payroll tax to increasing the retirement age – again! Some maintain the most appropriate way to raise taxes and retirement age would be to do so on only those politicians who have ever had a hand in getting us into this mess. Since the foxes are guarding that henhouse you can imagine the odds of that happening.
The secretly dishonest solutions are much more convoluted and difficult to follow, and for that very reason it has been the tried and proven methodology of Washington politicians for decades. These involve changing the formulas for benefits and altering the “bend points” used to lower the benefits of upper income earners.
The most secretive is the reduction of long-term growth. This involves using different consumer-price indexes (CPI-W, CPIU, C-CPI-W) to reduce the increases in Social Security. To go into more detail would only serve to glaze over every ones eyes. If you are having trouble sleeping, by all means look it up.
The positive aspects of owning gold only increase when one considers the likely jump in Medicare premiums taken from Social Security checks. Medicare is a problem that is four times bigger than Social Security. It alone will “turn up the volume” on the need to increase the payroll tax as well as raise Medicare deductions from checks that are already too small from Social Security.
We believe that everyone deserves a properly developed strategy for financial safety.
Chief Market Analyst, ITM Trading