A perfect storm combination of eroding Social Security trust funds, high unemployment and a flood of baby boomers all hitting retirement age at the same time will put enormous strain on the system for the next two decades and result force retirees and their advisors to come up with alternative retirement income plans and strategies to make ends meet.

This week, the Social Security Board of Trustees in its annual report to Congress warned that current Social Security trust funds will be exhausted in 2036, one year earlier than it predicted just last year.

More concerning, the board now predicts that in 25 years the pool of Social Security funds available will only pay 77% of the benefits due to recipients, even though more than half of pre-retirees are counting on Social Security to be their primary source of income in retirement.

The sobering data suggests pre-retirees, especially baby boomers, and their respective financial advisors will need to develop more comprehensive retirement planning and retirement income strategies, using a combination of personal savings, annuities, mutual funds, defined benefit pension plans and assets to ensure Americans have the savings they need to enjoy a reasonable retirement.

"By recognizing the deteriorating state of Social Security, today’s announcement by the Board of Trustees reinforces one of the primary retirement planning concerns for many Americans -- the instability of Social Security guarantees,"  Insured Retirement Institute CEO Cathy Weatherford said in a statement.

"As millions of Americans look to secure their financial future, the guarantees that only an insured retirement strategy can bring to a holistic retirement plan will become even more apparent," she added.

The board's report advised Congress that over the ensuing 75-year period, the Social Security trust funds will require additional revenue infusions equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits.

"The current Trustees Report again reflects what we have long known to be true -- we need changes to ensure the long-term solvency of Social Security and to restore younger workers' confidence in the program," Michael Astrue, Commissioner of Social Security, said in a statement.

In April, a survey conducted by the Associated Press and the LifeGoesStrong.com lifestyle website for baby boomers, found that 44% of Americans between 45 and 65 years of age aren't confident they'll have the resources to live comfortably in retirement, and more than half are counting on Social Security benefits as their primary source of retirement income.

Fifty-seven percent of the 1,160 baby boomers surveyed said they lost money in their retirement plans, personal investments or real estate during the recent economic meltdown, and 42% said these losses directly led to their decision to delay retirement so they can rebuild their nest eggs.

A similar survey commissioned by the IRI found that of the 801 Americans between 50 and 65 years of age queried, more than one-third aren't sure at exactly what age they will be able to retire. And of this group, 30% said the main reason for this uncertainty is their worries that they won't have enough money set aside to afford a decent retirement.

Meanwhile, IRI's survey found that 41% of baby boomers born between 1946 and 1960 view Social Security as a "major" income source during their eventual retirements, while 43% said it will provide only a "minor" source of income to go along with other retirement savings and investment income.

Also, the survey found a strong correlation between pre-retirees who have invested in annuities and overall retirement-readiness confidence.

Ninety-two percent of respondents who own annuities said they feel they're doing a good job preparing for their retirements, compared to 75% of those who have not purchased annuities. Also, 86% of annuity holders said they will have enough money to comfortably live out their retirements, compared to 73% of all respondents.

Larry Barrett writes for Financial Planning, a SourceMedia publication.

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