Scott Burns of MSN Money speaks on old-age poverty:
The phrase that is the title of this post comes from 1963:
The shopkeeper of a corner store in a slum looked at the kid and said, “Do you want to know what it's like to be old?”
He pulled a 2-pound coffee can from under the counter. He hurled its contents, hundreds of pennies, across the worn Formica counter.
“That's what it's like! Every month ends like this — a banquet of pennies.”
Burns then continues, saying that things are a little better today, but that there are still problems.
The one of most concern, potentially, to a lot of people who are nearing retirement, and many more who are nowhere near retirement, is the strong dependence on Social Security. More than two out of three retirees rely on Social Security for more than half of their income.
I think for people my age (mid 30s) it's unwise to count on Social Security for anything much more substantial than an occasional dinner out. Mentally I've already written off my FICA withholding as a tax rather than a retirement contribution. Worst case, I don't get anything back, but if I planned for the worst case, then I'm all set.
There's much more of a need for people my age (and younger) to save actively for their retirement. or otherwise provide for it. I don't see our social positions getting any easier to maintain, especially with rampant defecit spending and the rise of outsourcing. The idea of working for a company and collecting a pension is already turned on its ear.
Best to prepare now so that we're not shaking a coffee can full of pennies later.
I agree – I don't count on social security at all. I've been saving for my retirement ever since I got my first job out of college. So for me, I'll be just fine if social security goes bankrupt.
As an almost retiree I can attest to the fact that counting on SS is not a good idea. On CNN recently there was posted (for about 1 second so I'm amazed I caught it) where to get your retirement from – 55% from personal (savings, investments, you get the drift), 24% from SS and 21% from your employer. With many of the larger companies doing away with retirements, & SS not looking like a good idea as soon as you can – like Kassy from your first job – start saving/investing. With gas prices being high, taxes increasing, home prices going up, I'm just glad we've always been frugal. Live below your means and with savings/investing you'll be okay. Oh yes, be sure your significant other is 100% with you on this.