Justify Social Security ... Don't Save for Retirement by:Kemberly Wardlaw
It is a common question when investors review their retirement planshould we include
social security benefits into our retirement income projections?It seems the closer an investor is to retirement, the more likely he/she will include social security benefits into the analysis. Younger investors, however, may feel compelled to omit such benefits. They must then become mavericks on the retirement front. The choice is yours, but before you decide the influence of social security on your future, remember the following points:
When Franklin D. Roosevelt signed the social security act in 1935, he stated that social security gives some protection to American families. One reoccurring theme of his statement focused on assistance, not 100% protection. In the President's words, "the law will flatten out the peaks and valleys of deflation and of inflation (source: www.www.ssa.gov)."
For many, the Social Security Administration has raised the age of full retirement from 65 to adopt a more stringent schedule. This may be an addition of a couple of months or a couple of years. The administration justifies the increases due to longer life expectancies and general healthier life styles.
For example, those born after 1960, your full retirement age is 67. Going forward, we should ask ourselves "what other changes will be made to social security?" If you would like a complete schedule of retirement ages for full benefits, I recommend you visit Social Security's website at www.ssa.gov.
An opinion adopted by many is to consider social security in part the closer you are to retirement. For example, if you are sixty years of age and plan on full retirement in five years, you should consider an analysis based on your current projected benefits. Even with the proposed reform plans, preservation of benefits is a priority for eligible citizens age 50-55 and older.
If however you are thirty, it may be better for you to omit such projections. The result will be overfunded personal savings. Thus social security will be an added benefit and not the benefit.
Consider the troubling issues of the 2004 OASDI Trustees Report: future scheduled benefits for today's young workers could be reduced by 27% or more if amendments to the current plan are not adopted.
Young workers should take note of this report. Do not rely on social security and concentrate on personal savings.
In conclusion, you have a risky optionthere is only one way to justify social security, don't save for retirement. If this is your chosen route, be prepared for difficult times ahead.
About the author
Wardlaw's belief is that familiar life elements best illustrate practical investment strategies; not typical investment jargon. With that philosophy, the author assists financial planners/advisors, brokerage firms, periodicals, and other investment information syndicates create informative and entertaining articles. For comments and questions, please contact the author at tools2invest@yahoo.com. How to Turn an Idea into $100,000 by:Kathleen Gage Are You Brand Worthy? by:Kim Castle Get Some Discipline by:Elaine Currie, BA (Hons) The Seven Essential Elements To Successful Business Communication by:Lee Hopkins How to Start a Pet-Sitting Business by:Peggie Arvidson-Dailey Same Old, Same Old PR Still Tops by:Robert A. Kelly Save Money On Your Grocery Bill by:Shannon Jarvies Success From Failure Is As Simple As Focus, Plan, Execute by:Timothy Spaulding Are You Sabotaging Your Career? by:Brent Filson Stop Waste, Fraud and Abuse by:Chris Anderson Why Conventional Wisdom Is Almost Always Wrong! by:Daniel S. Peña, Sr Super Rules, OK? by:Darby Higgs Should You Lie On Your Resume? by:Donna Monday