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It’s understandable why the age of 65 has been synonymous with retirement. For decades men and women have pressed toward that mark in order to receive “Full Retirement Benefits” from Social Security. With that guaranteed monthly income for life now flowing in, many folks call it quits and can begin Retirement.

Let’s look at a simplified definition of retirement:

A point in time when an individual has sufficient financial

    resources to pay for the costs of living without the need of   

    employment or running a business.

Does the average American dream of being 65 so that they may have the time to enjoy life?

What about those who are in their Forties and younger? Should they structure their financial goals to include the promise of a future Social Security benefit?

I would say “Nay!” and here’s why:

In 1940 there were roughly 159 workers pay into Social Security for every one person already drawing a benefit – that’s a healthy ratio. As of 2010 there were merely 2.9 workers paying into the system, for every one person drawing benefits- not a healthy ratio, and certainly not a sustainable trend!

The Problem of Perception

Too many today view Social Security as something that can finally allow for retirement. That is not the (original) intention that system. Social Security was introduced as a means of keeping a worker from starvation. So when you take benefit that is intended to put food on the table and raise its perception to the level retirement income , you have a big disconnect! Huge Disconnect!

Whats Needed

I like the admonition, “Begin with the end in mind!” However, very few folks in the workplace do just that; it’s enough to focus on the pressing needs of this day.

If more individuals would pause for a moment and figuratively “Fast Forward” time in their minds and consider the fact that as long as they are taking in oxygen, they are going to need money. Where will that money come from? Your job? For your entire life? Well no one really wants that do they? At some point they either want to or HAVE to stop working  and at such point they will need to pull money some resource or resources.

If you are planning on the Government taking care of that, you are going to be immensely disappointed (and broke).

Those “sources” to draw money from are up to us to build! It’s time to make planning (and discipline) for our future a higher priority than entertainment, keeping up with the Joneses, and any other pleasurable trappings that hinder us from taking the necessary steps Today, for our tomorrows.

Time is a crucial factor!

Just last week I had a conversation with 23 year old about financial planning. He stated that he was focused on saving up for a house and “wasn’t thinking about Retirement.” While that sentiment is common and understandable among people his age, it’s also a huge problem. The cost of waiting, putting off planning for retirement, is a cost we may never recover from.

Consider this:

A 20 year old could invest $100 a month, aggressively in a properly diversified portfolio, continue investing until age 65, and have accumulated over $1,500,000!

If our 23 year old friend waits until he is 35, he would need to invest not $100, but $300 a month just to hope to break $1 million!

The cost of waiting until you’re 40? (Anybody?) $600 a month in hopes of breaking a million dollars. The more one procrastinates, the more it costs. Just five more years of putting off investing and it requires $1,100 a month for a 45 year old to break a million dollars by age 65!

Time to Start

The costs of waiting are staggering. Do it for yourself, for your family- start putting aside for your future. Change your cable package, reduce your frequency of eating out, brew your coffee at home, pay off a debt; you can find ways to find the money to put aside for your future.

It’s up to you, not the Employer, not the Government.

The sooner you start, and the sooner you accumulate the wealth needed, the sooner you can retire. You are not bound by the “Age 65 rule!”

Some books to help get your thinking in the right direction:

“The Automatic Millionaire”- David Bach

“A Random Walk Down Wall St.” – Burton G Malkiel

“Against The Grain”- Tim Rosen

“Faith and Finances” – Tim Rosen

Follow Tim on Twiiter @timrosentv !