THE GOLDEN YEARS

You have heard of the phrase, the golden years. They are those years of retirement we are all supposed to enjoy.

For those of you who are already retired, here are some interesting statistics. For every 100 retiree households and there are almost 25 million nationwide, 4 have an annual income of $60,000 or more; 20 earn between $30,000 and $59,999; 40 earn between $12,000 and $29,999; and 24 earn less than $12,000 and 12 earn less than $6,000. The earnings shown include social security, pension income, investment income and wages for those still working. Those retirees age 85 and over have a median annual income of $9,299 and unfortunately 7% of them are on public assistance.

The income earned by all retirees when broken down into income by source gives us a better picture of why some people are better off than others. Those retirees whose sole income comes from Social Security only earn $9132 annually. Those with a pension in addition to Social Security earn $20,023 annually. Those who have another source of income in addition to a pension and Social Security earn $30,773 per year.

These statistics should be setting off bells and whistles to my fellow baby boomers. There are 77 million people born between 1946 and 1964 who are classified in this category and they will begin to retire in the next 10 years. The strain on Social Security will be enormous. Worse yet, 3 in 5 "boomers" say they don’t make enough money to save for retirement and 3 in 4 worry about not having enough money for retirement.

Before we start to lecture this group, here is some other interesting government statistics. In 1948 the median income family paid just 2% in income taxes. By 1993, the median income family paid upwards of 35% in state and federal income taxes.

Think the cost of living is too high and there is not enough money to save? In 1983, a little over 60% of the average paycheck went toward normal household expenses. By 1990, almost 85% of your paycheck went to cover your normal living expenses. Yes, through higher taxes and a much higher cost of living there is less discretionary income to save.

Social Security is not intended to be a sole source of retirement income. The best solution for retirement planning is to add three additional income supports such as participating in a pension plan, your own savings and investment program, and a mix of insurance plans to provide protection. Call your favorite agent or our office for more information on how PRCUA can help you plan now for your "golden years".