Let’s get one thing clear: relying on Social Security for a comfortable retirement is a losing game. The system wasn’t designed to fully support anyone, and what’s worse, it’s on shaky financial ground. With average monthly benefits at around $1,922, retirees are scraping by, and this isn’t the retirement America’s hard workers should expect.
Here’s why Social Security alone won’t cut it, and why building your own income streams with smart investments is the way forward.
1. Social Security Benefits Are Barely Enough for Basics
A typical Social Security check amounts to just under $23,000 annually — hardly a sum that offers financial security, let alone comfort. For most retirees, it falls well short of meeting basic living expenses, which is why it’s time to face the truth: expecting Social Security to be your financial backbone will leave you hanging. Want a reality check? Take a look at your personal benefits estimate on the Social Security Administration (SSA) website. Most of us will see a number that isn’t exactly what we’d call “retirement ready.”
2. Cost-of-Living Adjustments (COLAs) Fall Short
Social Security’s yearly COLAs are supposed to help retirees keep pace with inflation, but they’re based on a measure that doesn’t really account for retirees’ expenses. Instead of tracking the costs that impact seniors the most — like healthcare — the current system is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which fails to consider retirees’ unique financial burdens. This bureaucratic blind spot results in adjustments that don’t reflect reality.
3. The Future of Social Security Is Uncertain
The clock is ticking on Social Security’s solvency. With outflows overtaking inflows, the program is heading toward a crisis. By 2035, it’s estimated that beneficiaries might only receive 83% of their entitled benefits unless Congress steps in. But counting on the government to fix Social Security in time? Let’s just say I wouldn’t bank on it.
The Solution: Build Your Own Income Streams
If you want financial freedom in retirement, you’re going to need more than just Social Security. Dividend-paying stocks are a great place to start. They offer reliable income, and with the right picks, your money can grow. Here are three solid stocks that yield high dividends right now:
Western Union
This company may have seen some setbacks, but its dividend yield is sitting pretty at 8.4%. Western Union has been around forever and is working on a comeback. The high yield could make it worthwhile, especially for income-focused investors.
Pfizer
Yes, Pfizer’s stock is down from its pandemic highs, but the pharma giant is more than just a COVID-19 play. With over 110 drugs in development and a recent acquisition of Seagen, Pfizer’s dividend yield of 5.9% is strong and the company’s pipeline looks promising.
Verizon Communications
Verizon might not be a growth rocket, but with a solid 6.6% dividend yield, it’s a strong bet for stable returns. Its expansion into 5G and fiber optic networks could add revenue in the long term, making it a decent option for retirees looking for consistent income.
And if picking individual stocks isn’t for you, there are ETFs like Schwab U.S. Dividend Equity ETF, iShares Core Dividend Growth ETF, and Vanguard Dividend Appreciation ETF that can provide diversified exposure to dividend-paying stocks.
The writing’s on the wall: Social Security isn’t enough, and it’s not getting any better. Real financial security in retirement will come from building independent income streams, and dividend-paying stocks offer a practical, sustainable solution. Unlike the promises of bureaucrats, these investments give you control over your financial future.
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