Every year, Warren Buffett writes his annual letter to Berkshire Hathaway’s shareholders. It is always an incredibly good read for everyone. This year’s report is no exception. In fact, Bill Gates wrote in the Wall Street Journal that it’s the best shareholder report that Buffett has written. That’s high, but well deserved, praise.
This NCAA March Madness tournament starts this week. You might recall that before last year’s tournament started, Warren Buffett offered anyone $1 billion if they would correctly predict the outcome of every game in the tournament. Buffett was extremely confident that he would not have to part with that money, and he was right. This year, Buffett has elected not to offer the $1 billion prize; not because he believes that anyone will correctly pick every game. Here’s a link to an article in Business Insider explaining the situation.
Kiplingers has an article today which discusses three of the biggest urban myths about personal finance today. The first myth has to do with the Social Security Administration; specifically if and when the Social Security Administration will run out of money.
I agree with Kiplingers’ assumptions here. The article suggests that many people (mostly younger people) believe that the Social Security Administration will run out of money and that there won’t be any money left for them (those young people) to draw upon once they reach their retirement age.
The Social Security Administration acknowledges that if nothing were to change, they expect that the money that has been put aside to pay Social Security benefits will be exhausted by 2033.
Does that mean that in just 18 years Social Security will had exhausted all of its funds? No. The trustees have indicated that new money coming in will allow for 80% of the expected funds to be paid out. So they are 20% short, not 100% short in two decades.
That afford the trustees time to resolve this issue. There are several ways that they can alleviate the shortfall. For instance, they can increase the retirement age or they could increase the maximum contribution amount just to name two ideas. They probably have enough time to make changes to the plan to allow for contributions to continue uninterrupted.