Retirement Saving - Use Your Time Wisely

Counting on Social Security for Retirement? Here's Why That's a Dangerous Path

June 18, 2018
Colin O'SheaBy Colin O'Shea
Securities Analyst

As a kid growing up, one of my favorite series of books was J.R.R. Tolkien’s "The Lord of the Rings." A group of friends bound together by a ring, have the burden to carry it through Middle Earth to the top of an enormous mountain range and save the world. Gandalf the Wizard guides the band of friends through their journey. One of the more famous quotes from the grey wizard is, “All we have to decide is what to do with the time that is given us.”

Sometimes the journey to retirement can seem as overwhelming as a trip through middle earth.

Previous generations of workers had a well-defined path to retirement. There were two main sources of income for retirement, Social Security and a government or corporate pension. Today the path is not as clear. With the financial uncertainty of Social Security and the decline of the popularity of pensions, more of the burden of saving for retirement falls on the individual.

Meme of Gandalf: You Shall Not Pass

What's Causing the Social Security Shortfall?

The Social Security Board of Trustees announced in its annual report that future retirees could receive 79% of expected benefits if the funding shortfall is not fixed. What is causing the shortfall? One of the major reasons is the fact that there's less money going in vs. the money coming out. There are fewer people entering the workforce than the number of workers retiring.

In 1940, there were there were about 159 workers contributing for every person receiving benefits. Today, there are only 2.8 workers per benefactor. Tax hikes, benefit cuts, a higher benefit age or some combination of all three could fix the Social Security shortfall. Unfortunately, there do not appear to be any near-term plans for Congress to tackle Social Security.

So how does one navigate the more treacherous path to retirement?

How to Navigate your Retirement Journey

We control what we can. We cannot control what happens to Social Security, but we can control how much we save.  There are a number of ways to save for retirement including 401(k)s and IRAs but not all of the options come with professional guidance.  

At Security National Bank, we routinely guide our clients on their retirement journey.  The most common question customers ask when talking about retirement planning is, "How much should I save?” Well, it depends. If you are just starting to save, you may not be able to afford what the plan suggests. Don’t worry. You can start with what you can afford today and work up to the amount needed for a comfortable retirement. If you are in an employer-sponsored plan, we suggest starting with the minimum amount your employer will match and going from there.

The best way to find out what you need for retirement is to use a financial calculator or have one of our financial “wizards” prepare a financial plan for you.

SNB Retirement Calculator

5 yr.
50 yrs.
$15K
$150K
1%
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$1
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You will have
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Estimate Only

Social Security (if any) would be in addition to the estimated numbers above.

Want More Than an Estimate? 

You can enjoy your journey to retirement if you are aware of the challenges you face — and take a little more time to plan. Contact one of our retirement “wizards” today — and, like Gandalf said, use your time wisely.

About the Author

Colin O'Shea

Colin O'Shea is a Securities Analyst within the Wealth Management Division at Security National Bank, where he researches and analyzes assets and trade securities and helps develop investment strategies. A veteran who served in the U.S. Army for 12 years, O'Shea holds a Business Administration Degree from Morningside College.