Social Security is in a death spiral

What most Americans don't understand was that Social Security was designed in 1935 to pay benefits to only a few retirees who reached age 65, and then only for a short period until death. At that time no one had any idea that benefits would be paid to millions for retirees well into their 80s.

As a result, the money that was to be paid to future generations has already been paid to those who continue to live well past 65.

But life expectancy into the 80s is a killer to retirement plans that pay certain benefits for life, such as pensions and Social Security. Their calculations, made just 30 years ago on the number of monthly checks that would be required for each beneficiary, have to be hiked by about 200 monthly payments past age 65. That is one hell of a lot of money. Based on an average Social Security retirement check of $1,200 a month, that's an additional $240,000, and it's one reason that Social Security and corporate pensions are in a death spiral.

On a more personal note"¦the longer you live the longer you can expect to live. Suppose you were born in 1940. At birth your life expectancy would have been 70 if a man, 76 if a woman. But many folks born in 1940 have died and those early deaths aren't considered when calculating the life expectancy of those who remain. The result is if you are still alive today, you can expect to live until around age 82 if you're a man, and age 85 if you're a woman.

Here's the problem: Those born in 1940 now collect Social Security retirement benefits. If they live out their life expectancy, the Agency and company pension plans can go broke paying endless monthly retirement checks.

What can you do? Look for my new book Who Stole My Pension with specific instructions in each chapter on freezing pensions, the PBGC, and how to save what you have when you lose your company pension. Also, e-mail info@financialsavvy.com with your name, phone number, and you'll receive more information on how to protect yourself as millions of workers lose their pension this year, and a sample copy of Financial Savvy Report - the weekly internet newsletter. - James Jorgensen