Planning for Retirement

 

well over fifty percent of retired Americans need some form of government assistance to survive. That a situation like this exists in a country that has enjoyed our level of economic prosperity is nothing short of embarrassing. Nowhere is the average person's lack of financial acumen more glaringly evident."

"We won't need government assistance," Cathy piped up. "Our ten percent fund will take care of any income problems. Don't forget that in May you guaranteed us that someday we'd be wealthy."

"Yeah, and not only will we have our ten percent funds, we'll also be drawing Social Security payments! This retirement planning thing isn't going to be painful at all. We just have to continue doing what we're doing now," Tom added hopefully, no doubt knowing in his heart that this argument wasn't going to wash with Roy.

"Not so fast," our mentor interjected, to no one's sur-prise. "You've brought up a good point, but your conclusion is faulty

"I'll back my guarantee of your future wealth one hun-dred percent. But the ten percent fund is not intended to augment our retirement income. It's our I've-made-it-big money. It's our I-can-now-do-and-buy-anything-I-want capital. A mansion on the lake, a condominium in Fort Lauderdale, a fancy car . . . these are the reasons we're saving ten percent of our net income," Roy concluded emphatically.

"But by that time we'll have so much that if we happen to be a bit short on the income side, we can just tap into our ten percent fund, can't we?" Cathy asked meekly.

"Ah, but we'd prefer not to, Ms. Richardson," Roy the Professor chided. "And ideally, if we save properly for re-