Get out that crystal ball again. You may have heard that the Social Security system is running in the red, but it’s a bit more complicated than that.
It's true that Social Security will soon start paying out more benefits than it receives in contributions, as the bulk of the baby-boom generation phases into retirement. The government's official position is that there is enough money saved to pay benefits at the currently scheduled amounts until 2041. The Social Security Administration admits on its Web site that benefits will likely be reduced after that, barring changes that improve the financial strength of the system.
The reality is, however, that if you're 55 or older now, you'll probably get the full benefit you're supposed to. Most of the recent discussions about reforming Social Security don't propose to change the benefits of current retirees or near-retirees. It's likely that political leaders will try to make changes in the system to improve its long-term financial health, but such changes are impossible to predict.
So if you’re under 55, rather than playing a guessing game, your best bet is to assume that financial security in retirement is your own responsibility. After all, even in the best possible scenario, Social Security almost certainly won't pay you enough to live on in retirement. So set aside as much of your own money as you can in retirement savings accounts and invest it wisely.