Money and Wealth (Part 9) – Saving (Part D) – Saving for Retirement; Social Security

Click here for the Entire Series and the Outline.

Click here for previous sermon.

Click here for next sermon.

Money and Wealth (Part 9) – Saving (Part D) – Saving for Retirement; Social Security

1. Follow the example of the ants and work hard and lay up for the future while you can during the spring, summer, and harvest times of life so that when the “winter” of life comes, you will not be a burden on others (Pro 6:6-8).
   1. Without a guide, overseer, or ruler (Pro 6:7), the little ant provides for her necessities.
      • Provide – II. 3. trans. To prepare, get ready, or arrange (something) beforehand. Now rare. 1535 Coverdale Prov. vi. 7 In the sommer she prouideth hir meate, & gathereth hir foode together in ye haruest.  III. 7. To equip or fit out (a person, etc.) with what is necessary for a certain purpose; to furnish or supply with something implied. In quot. 1628, to provide or furnish with a lodging.
      • If any provide not for his own, especially they of his own house, he is worse than an infidel (1Ti 5:8).
      • At least half of the people in this country are not providing for themselves and their families, but are relying on the government to do so in one way or another.
      • “In 2011, about 49 percent of the population lived in a household where at least one member received a direct benefit from the federal government. A big chunk of these households are retirees. And about 27 percent households benefited from a means-tested poverty program.” (Who receives government benefits, in six charts, com, 9-18-2012)
      • That number has likely grown in the last 13 years.
   2. The ant provides for her own meat.
      • Meat n. – 1. a. Food in general; anything used as nourishment for men or animals; usually, solid food, in contradistinction to drink.
      • The ant works to eat, and so must we.
      • If a man will not work when he can, he should not eat (2Th 3:10).
      • An idle man should suffer hunger (Pro 19:15).
   3. Having provided her food in the summer, the ant gathers it in the harvest.
      • Gather – 1. To join or unite; to put together, form by union. Obs. since early ME. 3. a. To bring (things) together; to collect from different quarters into one mass or place; to acquire by such means, to amass. Also to gather together.
      • Harvest – 1. The third of the four seasons of the year, the autumn. 2. The season for reaping and gathering in the ripened grain.
   4. Provision of food is made in the summer and gathering of it is done in the harvest.
      • The sluggard can learn from the ant about when in the course of life it’s important to work.
        1. Spring
           1. In the springtime of life, a man is just entering his working years.
           2. This is the time to determine what talents, aptitudes, and skills God has given him and begin to get an education or learn a trade to develop his abilities.
        2. Summer
           1. In the summertime of life, a man starts into his career and is in growth mode.
           2. During this time, he becomes more knowledgeable and productive and continues to increase his income.
           3. This is the time to start saving money and laying up wealth.
        3. Autumn or Harvest
           1. In the Harvest time of life, a man is at the peak of his career.
           2. He has a lot of knowledge and experience and his productive capacity is at its max.
           3. He is still able to work and use his talents that he has spent a lifetime acquiring.
           4. All of the planting, watering, and weeding that he has spent years doing is now paying off with a bountiful harvest.
           5. He is making the most money of his life, and his expenses should be at the lowest point in his life, having paid off all debt and having an empty nest with his children all grown and out of the house.
           6. Now is the time to reap the reward of a lifetime of labor and work and save as much money as possible while he can still work.
           7. As Jesus taught, it’s important to work while it’s day because the night cometh when no man can work (Joh 9:4).
        4. Winter
           1. In the wintertime of life, a man is now beyond his working years.
           2. He is old and physically incapable of working.
           3. At this point he should have a large store of wealth laid up that he can live off of for the rest of his life so that he doesn’t have to be a burden on anyone else.
        5. Americans desperately need to hear this message and learn from the wise ant because the vast majority of them have little to nothing saved for retirement.
           1. “A startling new report issued by the non-profit National Institute on Retirement Security found that despite the “recovery” of the last decade leading to all time highs in the stock market, the savings levels of Americans who seek to retire are “deeply inadequate”. In fact, the median retirement account balance among working individuals was found to be $0.” (“Retirement Crisis”: The Typical Working American Has Nothing Saved For Retirement, com, 9-19-2018)
           2. “The report found that more than 100 million Americans that are of working age don’t have any retirement account assets in an employer sponsored 401(k) type plan, individual account, or pension, at all.” (Ibid)
           3. “To make matters worse, 4 out of 5 working Americans were also found to have less than one year’s income in their retirement accounts. Even those that are trying to save for retirement are failing to do so effectively, according to the study. It’s stated that 77% of Americans come up short of even the most conservative retirement savings targets for their age, based on estimates that have them working until age 67.” (Ibid)
           4. “Diane Oakley, who authored the report, stated: ‘The facts and data are clear. Retirement is in peril for most working-class Americans. When all working individuals are considered—not just the minority with retirement accounts—the typical working American has zero, zilch, nothing saved for retirement.’ She continued, ‘What this report means is that the American dream of a modest retirement after a lifetime of work now is a middle-class nightmare. Even among workers who have accumulated savings in retirement accounts, the typical worker had a low account balance of $40,000. This is far off-track from the savings levels Americans need if they hope to sustain their standard of living in retirement.’” (Ibid)

1. A warning about relying on Social Security to provide for you in old age.
   1. Middle-aged and younger people should not include Social Security in any of their retirement planning, but should assume they will collect nothing from it.
   2. “Retired” people who are collecting Social Security and relying on it for all, or the majority, of their income should keep working (or start working) as much as they can and saving for as long as they can, while they still can.
   3. There are two main reasons for this.
      • First, when a spouse of a couple who are living on SS dies, the other spouse will lose between 33-50% of his or her income. The explanation as to why this is follows.
        1. A person has to have worked for the equivalent of 10 years (40 quarters) to collect Social Security.
        2. If a wife worked for 10+ years, she can collect based on the amount of money she “contributed” to the system.
        3. If a wife was a homemaker and did not work outside the home, she can collect half of her husband’s SS.
        4. Let’s consider two different situations.
        5. Situation 1: both spouses worked
           1. Let’s assume a best-case scenario wherein both husband and wife made the exact same amount of money and can therefore collect the same amount of SS benefits.
           2. To keep the math easy, let’s assume they both are “entitled” to collect $2,000 per month.
           3. Their combined household income is therefore $4,000 per month.
           4. When either the husband or the wife dies, the other is left with only his or her SS benefit and therefore has an income of $2,000 per month.
           5. His or her household income just dropped by 50% ($2,000 per month).
        6. Situation 2: only the husband worked
           1. To keep the math easy again, let’s assume that the husband’s SS benefit is $2,000 per month.
           2. Since his wife was a homemaker, she can collect half of his SS, which is $1,000 per month.
           3. Their combined household income is therefore $3,000 per month.
           4. If the husband dies, the wife stops receiving her half of his SS and instead receives his whole SS benefit, which is $2,000 per month.
           5. Her household income just dropped by 33% ($1,000 per month).
           6. If the wife dies, the husband is left with only his SS benefit of $2,000 per month.
           7. His household income has just dropped by 33% ($1,000 per month).
           8. So, no matter which spouse dies first, the other one is left to make due with $1,000 less income per month than before, which is huge.
        7. So, no matter the situation, when a spouse dies, the other one is left with between 33-50% less money to live on.
           1. Can you live on 33% less income than you are right now?
           2. Someday, unless you and your spouse die at the exact same time (very unlikely), you will be. Plan accordingly.
           3. A prudent man foreseeth the evil and hideth himself (Pro 22:3).
        8. Given this fact, a currently retired man should not stop working and saving until his has at least $250,000 saved. The reason is as follows.
           1. Suppose the husband in Situation 2 above dies in his late 60s or early 70s and leaves his wife who is near the same age (or much younger) a widow.
           2. She could easily live for 10, 15, or even 20 years as a widow.
           3. She now has $1,000 less per month to live on.
              1. That’s $12,000 per year less income to live on.
              2. In 10 years, (in her late 70s or early 80s – or much younger) that’s $120,000 in lost (and needed) income.
              3. In 20 years, (in her late 80s or early 90s – or much younger) that’s $240,000 in lost (and needed) income.
              4. This does not factor in inflation which always outpaces SS cost of living increases.
           4. Having $250,000 saved will cover his widow’s lost income if she lives for 20 years after he dies within a few years of retiring.
           5. This assumes that there will be no cuts to Social Security in the coming years, which brings me to the next point.
      • The second reason that men relying on Social Security should work as much as they can for as long as they can and save as much as they can while they still can is because the Social Security trust fund will be empty in eight years (2033) (https://www.ssa.gov/policy/trust-funds-summary.html).
        1. The trust fund provides about 20% of the Social Security payments to current recipients.
        2. “…Social Security’s Old Age and Survivor (OASI) and Disability Insurance (DI) Trust Funds are only a supplemental source of Social Security’s funding, currently paying for only about 20% of retirement, survivors, and disability benefits.” (What Will Happen If The Social Security Trust Funds Run Out?, Forbes.com, 4-20-2024)
        3. The other 80% comes from SS taxes paid by suckers like me and millions of other working people.
        4. When the trust fund runs dry, under current law, there will be an automatic 23% reduction in SS payments to current recipients.
        5. “Under the current law, benefits to existing retirees and beneficiaries would need to be reduced to the level that could be solely supported by FICA taxes paid by current workers at that time. According to the 2023 Social Security Trustees Report, benefits could be reduced by as much as 23% in total.” (Ibid)
        6. To avoid cutting benefits, FICA taxes would have to be raised (which would further impoverish working people and would be very unpopular) or the government would have fund it from other sources (which would create more inflation).
        7. What happens to the people in the above situations if there is an automatic 23% cut when the trust fund is empty?
        8. Situation 1 (from above)
           1. The couple in Situation #1 receiving $4,000/month from SS would have their benefit cut by $920/month and would only have $3,080/month of income.
           2. The widow or widower in Situation #1 receiving $2,000/month would have his/her benefit cut by $460/month and would only have $1,540/month of income. This means the widow/widower’s SS income would have dropped from $4,000/month when his or her spouse was alive to $1,540/month after the automatic cut took place. This means the widow/widower would experience a 61.5% reduction in household income.
        9. Situation 2 (from above)
           1. The couple in Situation #2 receiving $3,000/month from SS would have their benefit cut by $690/month and would only have $2,310/month of income.
           2. The widow or widower in Situation #2 receiving $2,000/month would have his/her benefit cut by $460/month and would only have $1,540/month of income. This means the widow/widower’s SS income would have dropped from $3,000/month when his or her spouse was alive to $1,540/month after the automatic cut took place. This means the widow/widower would experience a 48.7% reduction in household income.
           3. Can you live on 48.7% less income than you are right now?
           4. Someday, if you are a widow/widower who lives more than eight years from now and there is an automatic 23% cut to SS benefits, you will be. Plan accordingly.
           5. A prudent man foreseeth the evil and hideth himself (Pro 22:3).
           6. Prepare your horse for battle and then trust the Lord to take care of you (Pro 21:31).
   4. You need to start saving for retirement now!
      1. “How can I put this delicately? There is no shining knight headed your way on a white horse to save the day. Wake up! This is the real world where sad old people eat Alpo! Please don’t be under the illusion that this government, one that is so inept and dim-witted with money, is going to take care of you in your golden years. That is your job! This is an emergency! The house is on fire! You have to save. You have to invest in your future. You won’t be FINE! Do you get the picture?
      2. “We live in the land of plenty, and that has lulled a large percentage of Americans to sleep, thinking everything will be ‘okay.’ Things won’t be okay unless you make them that way. Your destiny and your dignity are up to you. You are in charge of your retirement.” (Dave Ramsey, The Total Money Makeover, p. 54)
      3. “What if your life depended on how you managed your 401k or whether you started your Roth IRA today? Actually, it does―because the quality of your life at retirement depends on your becoming an expert in money management today.” (Ibid, p. 63)

1. “Go to the ant, thou sluggard; consider her ways, and be wise” (Pro 6:6).
   1. By doing so, you will learn a good work ethic.
   2. By doing so, you will learn how to provide for yourself.
   3. By doing so, you will learn how to make hay while the sun shines and lay up wealth during your working years to live on during your latter years when you can no longer work.
2. “Don’t outlive your money.” (H. Jackson Brown Jr., The Complete Life’s Little Instruction Book, #838)