Will Social Security Last Through Your Retirement

By: Skip McGrath

The Congressional Budget office now estimates that Social Security and Medicare trust funds will run out sooner than previously expected. In the case of Medicare, the estimate is 2017 instead of 2019. For Social Security, based on the latest projection, Social Security will begin collecting less money than it pays out in 2016 –about 5 years from now. That doesn’t mean social security will end, but the government will have to fund SSI payments with more debt.

Both programs are suffering because of the recession. The simple explanation is that fewer jobs mean less money getting paid into the systems. That creates a bigger drain on the programs’ income. But the larger problem is massive government debt. About 20 years ago the government broke faith with the American people and started using Social Security trust funds to fund the general government budget. Had they not done that, experts estimate that there would be enough in the Social Security Trust Fund to last us through the retirement and eventual death of the entire baby boom generation until 2067 before there were problems.

In the current political climate it is unlikely that either party will cut benefits for current retirees –but if you are under 55, there is an excellent chance that you will see lower benefits or a higher retirement age. There is no choice in this –the system is broke –or soon will be and the money will just not be there. If you are under 45 you will probably see really dramatic changes to Social Security as they have to address the long term as well.

So what does this mean to eBay sellers? Well I know a lot of you are youngsters. When I go to eBay events I notice that the majority of eBay sellers are over 50 and I have met hundreds of sellers who are already over 65 and using eBay to supplement their social security.

If you are using your eBay earnings to supplement your social security income, I would strongly suggest you start putting some money aside as the direction eBay is going is away from small sellers and you may not be able to count on that income long term.

Unfortunately eBay has become more challenging for small sellers and I am finding more and more older folks writing me saying that eBay has just become too much work. I agree. I am 66. My wife and I are in good health but like most folks our age we just don’t have as much energy as we used to and eBay is more work.

Nevertheless eBay is so profitable for us that we don’t want to leave, so we have decided to split our business between eBay and Amazon. The fees are a little higher on Amazon and we have to charge slightly lower prices on some items which means it’s not as profitable as eBay –however, Amazon does all the work.

Last year we signed up for Amazon’s FBA program. This is really cool. We ship our products such as our ceramic chef knives to Amazon. They put them in their warehouse and charge us a small storage fee. We list the knives on Amazon. When one sells, Amazon collects the money and ships the product to the customer and then makes a deposit into our bank account. As I said our net is a little less than on eBay –but we tend to sell slightly more units per month and there is really nothing for us to do except create the listings and ship the products to Amazon.

Since we have paid off all of our debts, we set up the bank account connected to our Amazon account to transfer money monthly into our investment account. So basically we are living off of our eBay income and saving all the income from Amazon.