Grugger’s Way

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.

The new Obama Administration has posted an Agenda on the White House.gov website.

The new President has already articulated many of his plans for the future, but the website offers more details on about two dozen of the most important issues.

There seems to be something for everyone, seniors included.  The Obama plan for the tax structure would eliminate Federal Income Taxes for senior citizens with incomes are under $50,000 per year.

This would indeed provide some tax relief to seniors, who have recently found themselves continuing to pay taxes on the Social Security benefits that they assumed would not be taxed due to anticipated lower income bracket by the time social security benefits would be drawn upon.

Times have changed recently, and seniors often are supplementing their social security with part-time jobs; again, facing  income taxes on this money, and often pushing themselves into a higher tax bracket.  Not a happy situation, as most of the seniors I know are hard-pressed to make ends meet.

Of course, the President’s plans have yet to be introduced in Congress; and the details and definitions are not explained on the web site (there is still an immense amount of work to be done).   I assume the $50,000 number refers to gross income. I don’t know how the term “senior citizen” will be defined, age-wise.  It could be 65 or 70; it could be based on whether or not one is drawing social security benefits, or could be limited when only one spouse qualifies.

At any rate, I do think that tax relief in one form or another will be reaching us this tax year, 2009, and probably some form of tax structure revamping that will benefit the middle class as well and senior citizens for the next few years, particularly in light of the difficult economic times we all face.

9-11 is Still an Election Issue is the subject of today’s article on my political blog at Election Issues Decision 2008.

This is the Seventh Anniversary of that tragic event of September 11, 2001, and I chose to write about this in light of the importance the upcoming election plays in our security.  Not just the physical security of our country and the issue of military actions in the fight against terrorism, but in our personal security, which includes so many aspects of our lives.

Here, in our “third age” of life, we realize the shortcomings that we have made and the country has made in the past fifty years.  We see the results of a neglected social security system, a neglected health care system, an underfunded and understaffed education system, and a society that has to concern itself with crime, drugs, suicide, neglect,  and abuse: ALL of which affect the aged population just as much as every other citizen in the country.  And, in some respects, concerns us even more.

Here is an excerpt from my article over on the Election Issues blog, and a link to the complete article follows at the end.  Thank you for reading.

“Our citizenry’s financial (economic) security depends upon a robust job market, including housing and manufacturing.  Our financial security depends upon a fair and equitable tax structure.  Our physical security includes being secure in our own homes and neighborhoods, and this depends upon law enforcement and a crime rate that is under control.  Unemployment rates also affect the crime rate, and job opportunity depends upon an adequately funded and staffed education system.  This also means we need to have a disciplined population, with new generations enjoying the benefits of a structured family life grounded in some sense of morality, the teachings of the Golden Rule and the difference between right and wrong and what “decency” means.  Financial security extends into adequate health insurance to avoid loss of all that has been acquired, as well as a “social” security to ensure a comfortable old age.   And do you notice any election issues in the underlined items above?  Yes, of course.  Every single one.  And they ALL relate to Security.   Elections are all about security.”  SEE COMPLETE ARTICLE HERE

New Social Security Benefits Estimator tool

The Social Security Administration (SSA) recently announced the development of an improved ONLINE Social Security Benefits ESTIMATOR. This new estimator enables us to log on to a “secure” SSA site, enter our social security number, select a proposed age at which to stop working, and estimate our future earnings. The calculator will produce estimated benefit amounts for early retirement at age 62 and at full retirement age of 66, (or whatever age applies to your age group). The site reminds us that this is only an estimate. One difference that I see is that the calculator asks for your income from last year and adds it to your total earnings. Of course, the closer one is to retirement age, the more accurate the estimate. If you have a very good estimate of future income, that will also help the benefits calculator come up with something akin to what you may actually receive. It doesn’t make any adjustment for the cost of living increases between now and the retirement age, nor does it estimate what Medicare premiums may be deducted at a future time.

You can’t use the estimator if you are already drawing social security benefits under your own social security number, or are a Medicare beneficiary.

Overall, I would say this tool offers a very limited improvement over the benefits estimate that is mailed out to us each year about three months prior to our birthday.

Incidentally, the Social Security Administration also announced that a new system will be online in October, 2008 which will allow us to apply for our initial social security benefits ONLINE, without the currently required visit to a Social Security Office to present a birth certificate as proof of age. If all the information we provide ONLINE at the time of our application for benefits MATCHES the information the SSA has on file, then benefits can begin without an “in-person” visit.

You can click on the SSA logo above or paste this link into your browser to visit the SSA Benefits Estimator Page http://www.socialsecurity.gov/estimator/