The end is coming for Social Security - well, not really, but retirement planners say it would be smart to plan as if it were.
The government-run pension is expected to pay out more this year than it takes in, a point it wasn't expected to reach until 2016, The New York Times reported. If no changes are made to the system, the fund could run dry in less than 30 years, officials estimate.
Although there are likely to be changes - perhaps higher Social Security taxes and a later retirement age - several financial planners suggested not including it in retirement plans.
"Social Security is not a retirement fund," said Patrick Astre, a Shoreham financial planner and author of the book "It's Not Your Parents' Retirement." "It might keep you from starving to death."
It's a different world from when Social Security was formed in 1935. People live and draw benefits longer. And as the Baby Boom generation ages, it will put even more stress on Social Security.
"You can't rely just on Social Security," said Beth Meixner, 53, who runs an online women's business community from her Brightwaters home. "There's no way you can afford to live on just Social Security."
She said she and her husband have annuities and an IRA that will provide income when they retire.
"It has always been a good plan to be self-sufficient in all ways," said Shelley Johnson, a Huntington estate planner.
She said baby boomers are right to be discouraged by the prospect of a failed or diminished Social Security fund, particularly after watching economic cycles crush their 401(k)s and other investment funds "not once, but twice."
For people who are close to retirement or already retired, she said investments should be conservative at this point in their lives already anyway.
"There is very little change of course that can be made at this point," Johnson said, other than reducing spending on unnecessary things. "Don't spend the money if you don't have it in hand."
Younger people should assume the worst, planners said. And if the worst doesn't happen, it'll be like a bonus, said Mark Parrott of Creative Retirement Planning in Hauppauge.
By national standards, most Long Islanders would be considered relatively wealthy, even if they don't feel like it, Parrott said. What those people should do is plan for tax increases to save Social Security. Tax-free investments like municipal bonds and certain insurance strategies would be wise, Parrott said.
"This is a time of historically low taxes," he said, adding that will make it more feasible for Congress to save Social Security by boosting the taxes that fund it.
Indeed, portfolio manager Steven Roge of Bohemia said that tax increase will hit younger workers harder and they should make sure their investments are diverse enough to account for that.
"We're not making the assumption that Social Security will run out," he said. "Probably that's the least of our concerns."
Astre agreed that spreading investments around - and making the effort to manage them - is important, whether times are good or bad. "If you are diversified, you won't have a problem," he said.