photo credit: Alex E. Proimos
Because Social Security income is intended to supplement other retirement income, it alone is not enough to take care of you. If you have no other income source, I recommend that you continue working and saving as long as you can. Doing so will allow you to accumulate a much needed nest egg, and will permanently increase your Social Security benefit once you do retire. Many people in their 60’s today will live into their 90’s, so every penny that you save now will be critical to you later.
I want to challenge you to view retirement as more than simply quitting work. Retirement with dignity should mean that you are able, maybe for the first time in your life, to pursue your passions. Retirement is not lack of activity, but focused and meaningful activity. Grandma Moses began painting in her seventies. Colonel Sanders was in his late sixties when he began frying his “finger licking good" chicken. What dreams have you suppressed…maybe for years? What if living out your passions could provide an unexpected and needed income? Life could get exciting!
Advice to the Young
To my younger readers: you should make retirement plans based on the assumption that Social Security is not going to be there for you. The good news is you have time on your side. An investment of only $500 per month (about the same as a new car payment) from age 25 to 65, at an average return for most mutual funds will give you a nest egg of $5,881,000. Drawing 6% annually from that nest egg would net an annual income of $352,860. If the investment is all Roth IRA’s, your income would be totally tax free. Do you think you could manage to get by on nearly $30,000 tax free monthly income? Then get started…NOW!