Justify Social Security ... Dont Save for Retirement

It is a common question when investors review their retirement plan-should 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: http://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 http://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 option-there 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 mailto:tools2invest@yahoo.com.

---

Do You Need A Financial Planner?

No matter how much money you make, it pays to... Read More

Just Say NO to Your Stock Broker

We have all heard that slogan that started back when... Read More

Why Do You Want to Become a Online Trader?

Motivational guru Tony Robbins teaches that the reason for doing... Read More

Time is Money and We Are Running Out of Both!

One of the fundamental principles of finance is the concept... Read More

The Demise of Buy & Hold

Based on consistent results I think Buy & Hold should... Read More

Annuity Investment - The Whole Truth

Do you ever feel like you haven't been told the... Read More

Investing in Car Dealerships: How to Do It Right

The financial characteristics of the automobile dealership are attractive:". .... Read More

Maniac Investment

Let's first understand what maniac means. According to Webster a... Read More

Creating Wealth by Gearing Up

Gearing is where you borrow money to invest. As already... Read More

The Dreaded Direct Question

(Please have a glass of water within reach before reading... Read More

It Must Be Joe Cockers Market

Agonizing displays of poor theatrics failed to entertain my mind... Read More

Investing Online Has Its Rewards: Find Out How To Take Advantage Of Them

Computerized investing. Online investing. Have you taken the next step... Read More

Why You Need To Buy and Sell Gold Coins (Part 1)

The Value of Gold in a Era of Paper Assets,... Read More

Coca-Cola - A Value Stock?

There has been much talk lately about Coca-Cola and its... Read More

Well Managed Investing Risks Bring Rewards!

"Risk comes from not knowing what you're doing!" Warren Buffett... Read More

Discipline in Investing and Trading

Discipline can be simply defined as your ability to follow... Read More

Mutual Fund Returns May Not Be As They Seem!

Arthur Levitt, during his tenure at the SEC, experienced many... Read More

Profitability And Stock Turn Rate

The inventory of the typical store represents the largest single... Read More

It?s Never too Early to Start Investing!

Remember the old saying, "never too late to start"? Well,... Read More

Your Portfolio and ?Old Ironsides?

The USS Constitution first ventured into the waters in 1798.... Read More

Beta Factors: How They Can Be Used In The Current Situation

Ever since the turn of the century, world stock markets... Read More

Annuity Help

Many people today are looking for annuity help. The biggest... Read More

Ask The SEC

Who is the SEC and why should I ask them... Read More

Caveat Emptor: You May Owe Taxes Despite 401(K) Losses!

One among many ways you lose money in non-indexed mutual... Read More

Creating a Financial Future--Putting Your Plan Into Action Part 2

Real Estate can be a useful tool for investing. The... Read More

The Economys Greatest Depression Downturn Ever Is Now Just A Few Years Away

What really controls the economy? Forget interest rates, forget deficits,... Read More

Trading For A Living - Part 2

In part 1 of this article I started to look... Read More

July 2005: Hurricane Forecasts for Weather Traders

Tropical Storm Arlene formed as a tropical depression on June... Read More

Stocks: Reduce Risk Yet Maximize Profits

It is important to note that every smart investor wants... Read More

Part II of Day Traders and Swing Traders and Options? Maybe!

Before every protective put trade it is possible to calculate... Read More

Top Ten Investment Mistakes

1. Lacking an investment plan a/k/a/ "Don't take a trip... Read More

Your Worst Enemy To Successful Investing - The Media

How do you make your investment decisions and where do... Read More

For Entrepreneurs A SIMPLE Plan May Be Best

Q: I own a small decorating business and I'll be... Read More