Page 81 - Workbook3E

Social Security
In 1950, social security represented 50% of retirement income for people in the U.S. In the twenty-first century, it represents less than 30% of retirement income and will be a declining share. The hard fact is retirees in the future will be able to depend less and less on social security as a source of money.
Social security benefits are available to
you at age 62. If you retire before your full retirement age, you’ll receive a smaller monthly benefit. If you continue to work after you begin to receive social security benefits, you’ll lose some or all your benefits under certain conditions. If your income from various sources exceeds a certain amount during retirement, you may have to pay taxes on your benefits.
Your local social security office can explain how social security can work for you. Also, you may ask for a Statement of Earnings to see the social security earnings credited to your account to date. You should verify this record at least every three years.
Investments and Savings
Investment and saving are good methods of putting your money to work, to “earn” money for the future. The Federal Reserve Bank of New York offers the following advice on saving and investing. There are two basic methods: the first involves lending (making investments), and the second buying (creating asset equity):
1. Debt or Money Market—When you lend money you can typically expect to receive interest on it sometime in the future. The following are examples of putting your money to work in the “debt” or money market:
• U.S. Treasury and Agency Securities: These are investment securities or opportunities backed by various agencies of the U.S. government, including the U.S. Treasury. They include issues from such agencies like the Federal National Mortgage Association (FNM), Federal Home Loan Bank Board, Federal Land Banks, and U.S. Savings Bonds. They’re considered to be highly safe investments.
• Corporate Bonds: These investment securities are
offered by many companies and vary considerably in
their quality and rates of earning returns. Such securities are graded according to their financial backing by bond- rating services—the highest rating being AAA and generally offering lower interest yields. The market price of corporate bonds fluctuates.
Create your own retirement plan
“I do have many talents, but none of them make any money...”
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