Save Now, or Pay Later

by Burnett Sawyer

Imagine…this is your paycheck

• You’ve worked hard for it.

But first…20% for income tax

• Uncle Sam must have his share.

Then…30% for Social Security

• According to Senator Alan Simpson, our generation will have to pay this much.

The news gets worse!

• Even that won’t be enough to keep Social Security alive in the year 2043.

• Remember that year—2043.

What’s the problem?

• The Social Security system can’t ensure our savings for retirement.

What’s the solution?

• We have to start our own savings plans, and the earlier the better!

Social Security Timeline

• 1935: Social Security system began

Social Security Timeline

• 1935: Social Security system began • 1983: System is adjusted, predicting a 2056 end

• 2056: The end of Social Security (1983 adjustment)

Social Security Timeline

• 1935: Social Security system began • 1983: System is adjusted, predicting a 2056 end• 1992: System is revised, predicting a 2043 end

• 2043: The new end of Social Security (1992 revision)• 2056: The end of Social Security (1983 adjustment)

Social Security Timeline

• 1935: Social Security system began • 1983: System is adjusted, predicting a 2056 end• 1992: System is revised, predicting a 2043 end• 2029: Social Security to bankrupt the US (AARP report)• 2043: The new end of Social Security (1992 revision)• 2056: The end of Social Security (1983 adjustment)

What won’t work . . .

• We can’t leave the problem to the government.

• One more “fix-it” job won’t solve anything.

What will work . . .

• We each need a personal savings plan.

• We should save $200,000 by age 67.

A $200,000 Savings Plan

$0$100$200$300$400$500$600$700$800$900

Monthly savings necessary

Age 25Age 35Age 45Age 55

In summation . . .

• The Social Security system can’t promise us financial security when we retire in 2049.  

So let’s get started . . .

• We have to start our own savings plans.

• The earlier we start, the easier it will be to reach our goals.