Is Social Security a Better Investment than Real Estate?

16 Aug

MetroBoston, Publication Date August 15, 2012
By Attorney George Warshaw

The Associated Press reported a story that many missed: “Since 2010, Social Security has been paying out more in benefits than it collects in taxes.”

“The Social Security trustees project the [present $2.7 trillion dollar] surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction . . . . The projected shortfall in 2033 is $623 billion, according to the trustees’ latest report. It reaches $1 trillion in 2045”.

If Congress does nothing – which it has been inclined to do (after all, THEIR benefits aren’t affected) – they will have to raise your retirement age, cut your benefits, or raise your taxes. Likely, all three.

Is your condo or three-family house a better revenue source than Social Security? Well, you’ve likely refinanced it to the lowest possible interest rate imaginable.  It will be paid in 30 years.

Which do you think will be a better source of future retirement income: what you already own and can rent or social security?

I’m betting on rental income.

So, if there is any way you can keep or acquire future income generating property, it may be a better bet than social security.

More next week © 2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

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