Page 39 - Book2E

The result? If you don’t withdraw any of the funds for the full 37 years, you’ll have $1,000,000 for retirement. Better start today!
President Roosevelt signed the Social Security Act on August 14, 1935. Since then, more than 420 million people have been provided with a Social Security Number and a sense of security for retirement.
It is never too early to take a close look at what your financial status will be when you retire. Although the Social Security program has been very successful, things have changed somewhat over the past 70 years. People today live longer, they retire earlier, living expenses are higher, and guar- anteed income from pensions and government programs is diminishing. In 1940, for example, the average man could expect to live to age 61. Today the average male lifespan is 74. A woman, in 1940, could expect to live to 66. Today she will probably live to 80. Baby boomers are now beginning to retire, and there are 78 million of them. For each person retiring, the number of people paying into Social Security will drop from 3.3 per person to 2.1 per person by 2031.
The other number dropping significantly is the amount the average American is saving every year. An individual who would have saved 10.8% of his or her income 20 years ago, would now save just above 1%.
But there is good news. With so much
attention focused on the question of how
much Social Security money will be avail-
able over the next few decades, changes are
being made to saving incentives to encour-
age people to increase the amount they save annually. Automatic enrollment with yearly increases in contributions for 401(k) plans, Simple IRAs, or other investment vehicles, increased deposit limits for retirement plans such as IRAs, and tax incentives for long-term savings are being put in place to take some of the weight off Social Security.
Retirement: Are You an Ant or a Grasshopper?
Every day I get up and look through the Forbes list of the richest people in America. If I’m not there, I go to work.
—Robert Orben
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