Planning for Retirement

 

purchasing term insurance instead of cash-value insurance, your qualified annual contributions to these plans will be largely financed without you having to do impossible additional saving. You'll have to save some, of course, but it will be a reasonable amount. And if we use our old trick of paying ourselves first, we'll hardly notice it.

"True?" he challenged Jimmy, James Murray, and Clyde.

"True," two pronounced, over Clyde mumbling, " 'Hardly' may be a little strong."

"How exactly does the government 'subsidize' contri-butions?" I questioned.

"All in good time, Dave, all in good time. First, let's take a quick look at a retirement income source Tom al-luded to earlier: Social Security.

"Like it or not, the government imposes what I call 'mandatory retirement-savings discipline' with its payroll tax for Social Security. It is essential, I repeat, essential, to understand that Social Security is intended to be, at best, either a safety net for retired Americans who, for whatever reasons, are in dire need of an income to subsist or an augmentation of retirement income for those of us lucky enough to have pension income, investment assets, or both. At worst, especially for participants as young as you three, Social Security may well end up being social insecurity."

"No kidding!" Tom blurted out. "The younger guys at work are always complaining about having to pay into Social Security when a lot of articles claim that, by the time we retire, the whole thing may be bankrupt. That's a lousy deal!"

"In the eighties the system received bolstering to assure benefits for participants now in or near retirement, and