Social Security or Social Insecurity

I received my new issue of Money magazine yesterday. It has an ominous article about social security and medicare. We have known for a long time that those two programs are in trouble, but the article does a nice job of laying out exactly what the issues are and what the potential fixes are. To boil it down, we should expect the feds to raise taxes and cut the benefits that we will receive. They could do one or the other but it is more likely that they will do a combination of the two. Social security can be fixed fairly easily, but it is Medicare that is the biggest problem. It makes it tough for all of us to plan our retirements because we don't know exactly what is going to happen, so we end up having to plan for the worst. In some ways, I just wish they would do something, fix it however, just to remove the uncertainty so that we can know how much we need to save for retirement. As it is, I am thinking that we will need to change our calculations and assume that we will only receive 75% of the benifits that we are supposed to get. Then we can recalculate how much we need to save, or assume that we will have a lower income in retirement. If we get full benefits, I guess we would look at that as a bonus. Trying to plan for retirement has become such a moving target that getting it right is becoming increasingly difficult to get it right. The article also says that we will need several hundred thousand dollars to pay for out of pocket health care expenses. Several articles I have read give out varying numbers on that, but they are all really high. Yikes. I wonder what the future holds for all of us in terms of retirement. I know that I read a great deal about personal finance and I know that very few other people do. When I bring up any of these topics with people I know I usually get the blank stare. If I mention something such as a target date retirement fund to my coworkers, I might as well be speaking Chinese. As complicated as finance has gotten, and with as little financial education as there is, how is the average person supposed to survive in these times. We are increasingly expected to take charge of our financial lives(401(k)s instead of pensions) however too many people are ill equipped to do so. It worries me...a lot.