Social Security won’t be around like it was for previous generations. What are Americans who have yet to retire doing about? Yahoo! News asked readers to share their strategies. Here’s one.
FIRST PERSON | More than 30 years ago, when my retirement seemed light years away, I received my first Social Security Statement. It was quite an eye-opener to discover that my monthly benefit wouldn’t come close to providing what I needed to enjoy my retirement. Thanks to this wakeup call, I recognized the importance of developing an income strategy, and implementing it sooner, rather than later. Here’s what I did that enabled me to recently retire, with the confidence that I’d have the financial independence to pursue my personal goals and interests.
Save for retirement
When I started my career in Lynchburg, Va., more than 40 years ago, pensions were still the norm. By combining my pension and Social Security benefit, I would have a good starting income, but unless I was willing to drastically alter my after-retirement plans, I needed an additional source of income. That’s why, early in my career, I began investing in my company’s 401(k). I contributed as much as possible each paycheck, and I selected no-load mutual funds that were tied to S&P indices. Also, despite all the ups and downs of the stock market, I resisted the temptation to chase the latest investment trends.
Know when to retire
As a project manager, I knew the importance of planning an exit strategy. So, five years before my target retirement, I began meeting with several financial advisors for their recommendations. I wanted to work with an organization I felt comfortable with, that didn’t overpromise, and who was a leader in the industry. My choice, Fidelity Investments, not only met my requirements, but it had an excellent retirement planning tool that was instrumental in helping me confidently time my departure.
Make Social Security a Minor Player
With all of the recent reports of insolvency, I know I made the right decision to minimize the impact my Social Security benefits have on my bottom line. I consider my Social Security benefit to be a bonus that will supplement my income, not define it. Don’t waste your time and energy worrying about whether you will recoup your Social Security contributions during your lifetime. You can’t control what happens to Social Security in the future, but you can control what you do now to plan for your retirement.