Mar 23 2009
Living Relatively Well is Relative
Retirement poses many challenges, and financing our retirement is certainly amongst the most important and most complicated.
How well we live in retirement is relative to how well we lived PRIOR to retirement, or course, but it is also relative to how we THINK we should be living.
I have long subscribed to the “three-legged stool” of financial security; that is, that we should not depend on any one source of income, but rather that we plan to maximize each of the various sources of income that might be available to us.
Social Security for most of us is a mainstay of our retirement income plans, not because it is necessarily the largest source of our income, but because it has always been the most assured and the most dependable. If that sounds duplicative, by “dependable” I mean that the money will be there on time, month after month. You don’t have to go after anyone to make sure you are paid. “Assured,” to me, means that this is a guaranteed entitlement from the U.S. Government.
Regardless of all the dire claims and warnings about the Social Security System, it is fully funded through the year 2041, and I do confidently believe that the people of the U.S. would not tolerate any government that failed to meet obligations to its citizenry. This is, after all, a government BY the people, etc., etc., and we will always have the means to sustain this ABSOLUTELY ESSENTIAL program.
When we look at the Billions of dollars now being applied toward economic stimulus and financial bailouts, we can see that the means are available to bailout social security if and when the time comes as well.
The second “leg” of the financial security “stool” are private retirement plans, (within which I include 401K, 457K, Simplified, Keogh, IRA, and Roth plans). The third “leg” is individual savings (this includes Certificates of Deposit, Savings Bonds, Passbook Accounts, Money Market Accounts and any other dividend earning stocks and interest bearing bonds).
There can be a fourth leg to this “stool” and that is earned income, which means full-time or part-time employment, or earnings from consulting, writing, or speech-making, and other various forms of “pay for work” that we might do, whether mowing lawns, delivering newspapers, or babysitting. (Yes, sometimes we do go back to doing what we did as teenagers.) I also include here any money we might earn from Blogging. HA HA HA.
Oh, yeah, like I am going to finance my new Motor Home with earnings from Google Adsense. More laughter merited here.
