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Learn
the Facts on
Do you know how much money you’ll need to maintain your family’s current
standard of living in retirement? If the answer is No, you’re not alone. A
recent national survey found that more than half of working Americans have never
determined the amount of money they’ll need to live comfortably in retirement.
Today’s modern workforce is the most mobile in American history. Most
employees change jobs many times throughout their career. As a result, the
company pension programs created for loyal staff who stay for 25 years or more
have become nearly extinct. Yet many Americans erroneously believe that Social
Security will fill in the income gap at the end of their career. Unfortunately,
with millions of Baby Boomers expected to live well into their eighties, 20 or
30 years past retirement age, many seniors will be left short by their failure
to adequately plan for their financial futures.
Yes, millions of consumers lack the basic information they need to save and
invest wisely. But what does this have to do with the Secretary of State? My
office is the state agency responsible for regulating securities broker/dealers
and investment advisors. We
encounter far too many Georgians who make
unwise investment decisions that leave them in a financial hole, with little
prospect for escape. Almost as tragic are those who make no real financial plans
at all until retirement, when few options remain for achieving the security
older Georgians need.
Research tells us that this problem of financial illiteracy in fact
starts early. A recent survey by the JumpStart
Coalition for Personal Financial Literacy, a non-profit group that sponsors
financial workshops for America’s youth, revealed that many teenagers have no
idea what Social Security or a 401(k) plan is. The study also found that a mere 30 percent thought that retirement income paid by a company was
called Social Security, rather than a pension.
In an effort to stop this spiral of financial illiteracy, the Office of
Secretary of State recently partnered with securities regulators, financial
industry associations, government agencies, educators, and consumer groups from
across the nation for the Facts on Savings and Investing Campaign. The campaign, through
educational seminars and programs, encourages Americans of all ages and incomes
to get the facts they need to save and invest wisely, and to avoid financial
fraud.
Following is information on basic
savings and investing principles. Contact the American
Savings and Education Council for more details.
Get the facts: Knowing how to secure your financial well-being is a critically important life skill, but no one is born knowing how to save and invest. The first step in learning about saving and investing, or choosing an investment product, is to gather as much information as you can through careful research. How you save is just as important as how much you save. Inflation and the type of investment play important roles in calculating the amount you’ll have saved at retirement. Financial security and knowledge go hand in hand.
Know your retirement needs: Retirement is expensive. Experts estimate that you’ll need about 70 % or more of your pre-retirement income to maintain your current standard of living.
Learn about your employer’s pension or profit sharing plan: If your employer offers a plan, check to see what your benefit is worth. Most employers will provide an individual benefit statement. Before you take a new position, find out what will happen to your accrued pension.
Devise
a plan and stick to it: Financial security starts when you take personal
responsibility for your financial well-being. If you pay attention to your
money and take charge, you’re more likely to gain financial security. And
the sooner you begin saving, the more time your money has to grow.
The small steps you take today can really add up over the years. Whether your goal is buying a home, sending your kids to college, or investing for a comfortable retirement, you’re more likely to achieve your goals if you start planning for your future today.
Ready to work with some numbers? Use these on-line calculators courtesy of the Georgia Bankers Association: