People have traditionally been able to rely on Social Security to fund their retirement. The future of Social Security seems less certain all the time and folks need to invest to ensure their ability to retire.
I know, investing seems riskier now, due to the recent recession, but the average return for any 65-year period for the past 100 years is still more than 8 percent.
The sooner young people start saving, the more likely they will be able to decide when they retire and if they will be able to maintain an acceptable standard of living. Someone earning only $10 an hour for their entire working career would accumulate $700,000 by investing 10 percent of their income ($40) for 40 years with a return of 8.5 percent. Assuming they could earn 4 percent on the $700,000, they would be able to add $28,000 a year to their income without depleting the $700,000.
If people take control of their own financial future, they will not have to rely on the government’s ability to protect Social Security benefits, and they might even be able to sleep better at night.
Randy Mitchell, Leeds
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