A large number of American workers are, at any typical moment, giving some serious thought to their future retirement years and how best to prepare financially for them.
Scott Galloway, bestselling author and host of the Prof G Show podcast, has a specific warning on the future of Social Security and also offers some powerful words about retirement advice in general.
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The much-discussed threat of Social Security insolvency (when the federal program’s trust funds run out of money) does not seem to worry Galloway. If this were to happen without new legislation, Social Security recipients could see their monthly paychecks cut to only about 75% of their current amount.
He acknowledges that current projections suggest insolvency may occur in 2033, but explains that government officials insist they do not plan to implement cuts to the program. In fact, doing so would be a politically perilous action.
Related: Scott Galloway warns Americans on Social Security, retirement risk
Galloway sees only two potential different paths forward for Social Security, neither of which would be a positive development.Â
He envisions either deficits (which he describes as “taxes on the young”) or some form of means-testing that would involve a wealth or income cap on eligibility for benefits.
A retired man is seen teeing off toward the sun on a golf course. Podcast host Scott Galloway says much common retirement advice is based on an outdated construct.
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Scott Galloway warns that retirement in general — not just Social Security — has a problem
In his book, The Algebra of Wealth, Galloway explains his belief that the advice people receive broadly about retirement is fundamentally flawed.
“Typically, personal finance advice is built around ‘retirement’ (a clear distinction between working and no longer working),” he wrote. “It’s an outdated construct and not central to our philosophy of wealth.”
More on Scott Galloway:
Scott Galloway warns Americans on Social Security, retirement riskScott Galloway has surprising thoughts on retirement, Medicare
Galloway clarified that his advice involves encouraging people to obtain a significant level of economic security before they stop working.Â
“Once you’ve achieved economic security, you may decide to continue to focus on work and professional achievement. I have,” he wrote. “But the stress surrounding work declines dramatically when it becomes a surfboard instead of a life preserver.”
The New York University marketing professor makes an analogy about how positivity and courage of one’s convictions leads to financial success.
“We perform better when we are confident,” he explained. “Work is a bit like dating in this regard — the less you need your job, the more it needs you.”Â
Related: Scott Galloway has startling words on Social Security, Medicare
Scott Galloway discusses wealth expectations for retirement
Galloway urges people preparing for a comfortable retirement and Social Security to consider the difference between what really provides one with happiness and how that vision is distorted by unrealistic representations of the ultra-wealthy that permeate modern culture.Â
“The key to happiness is our expectations, and unrealistic expectations guarantee unrealized happiness,” Galloway wrote. “Yet every time you leave your house or pick up your phone, society and its organizations are either serenading or swearing at you.”
“The difference between the lives of the 1% and the 99% is thrown in your face every day — an entire industry of simulated, flaunted wealth has developed around ‘influencers,'” he continued. “Wealth porn (is) a constant reminder not of what you’ve achieved, but what you haven’t.”
Galloway offers some advice on how individuals can approach dealing with this reality in a healthy way.
“The system may need fixing; until then you have to stand it,” he wrote. “Better yet, work it and develop the skills and strategies to increase the likelihood you will prosper within it.”
“If the system suits you, play it the best you can,” he continued. “If it doesn’t, play the best you can. None of this is your fault. Society faces greater risks than you becoming a millionaire.”
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