In 1970, the approach of “You’ll Earn a Fortune” was taught by many life insurance carriers. “Make sure you protect your earning power!” The arithmetic in those days was very simple:

$25,000 x 40 years = $1,000,000
That was and still is a lot of money. Think about it in 2014 terms with age 70 now the norm for retirement and the math is still easy:

$50,000 x 45 years = $2,250,000
Now that’s a chunk of change! Where does it all go? Here are a few things that come to mind:
– Food, clothing and shelter
– Education expenses
– Income and Social Security taxes
– Leisure and recreation
– Insurance (Auto, homeowners, medical, life and disability)

These are all necessary and legitimate expenses. How about retirement funding? If you aren’t addressing this throughout your working years, your retirement years might not be as enjoyable as you would like.

My first agency trainer played at Georgia in the mid-1930’s. He was not a fan of Social Security and cautioned us with a statement of “All you will have is what you send on ahead.” In this day and age, that’s particularly good advice.

Without going into a lengthy sidebar, suffice it to say that our Social Security program is rather wobbly. The unfunded liability is staggering and with less workers paying into the system, something will have to give. Higher taxes and a normal retirement age of 70 are near certainties. When you add to the mix politicians who want to extend these benefits to people who shouldn’t even be in this country, you have a system that could collapse one day.

Voting politicians of this sort out of office is a good start on fixing the problem, but in the meantime, what are you doing to send more money “on ahead” for your retirement years.

Are you taking advantage of your employer sponsored retirement plan and if not, why? Assuming a 401-K is offered where you work, there is probably an employer match and that’s free money in your pocket. Traditional pensions aren’t as prevalent as they used to be although public school systems and many state and local governments still have them. If you’re self-employed or even if you aren’t, Traditional and Roth IRA plans are available to help you send some dollars “on ahead.” Even a very small business owner can establish and maintain a Simplified Employee Pension (SEP) or a Simple IRA. Many of these plans weren’t available in the 1970’s.

Finally, what are some individual options available to you? Start with your home which can generate significant retirement via a reverse mortgage. Other non-tax qualified plans including real estate, annuities and securities offer opportunities to send dollars “down the road” and in some cases defer taxes for many years.

Future articles will address both positives and negatives in these options. In the meantime, think about whether you are sending money “on ahead” for you and your family. Don’t kid yourself into believing the government will take care of all of your retirement needs. They won’t — and can’t!

Mike Lassiter is a Chartered Life Underwriter and Chartered Financial Consultant. He is a Licensed Insurance Counselor and a Registered Investment Advisor. He can be reached locally at 770-786-2781.