What if I would have been able to receive in
a lump sum on the day I retired back in 1991, all of my social security money
that I and my employers contributed to my account?
I was impressed.
In fact, I was really impressed.
On the day I retired the S&P 500 Index closed at 312.49. As of this writing,
it's around 3300, roughly a 8.0% annualized return plus a couple of
percent for dividends. We will call this a ten percent annual return.
What I learned is that had I been able to invest my contributions into the S&P
500 Index, my annual take away from Social Security today would be three times
what I am currently receiving. Three times, and without touching the principal!
Think about this...
If you are planning on receiving $2000.00 per month from
Social Security, under this scenario I just described you could receive $6000.00
per month. This would be a nice retirement boost, for sure. Plus, what if you
would be able to add this asset to your estate and therefore able to gift it
You can’t do that with Social Security.
Imagine if I could have been able to invest in this fund beginning when I
started working in my teenage years? The amount per month that I would be able
to withdraw would be considerably higher.
But, what if’s are for children.
The reality is that our current Social Security System does not allow such an
investment. Therefore it is important to create your own retirement strategy and
My advice is that whenever you get paid, invest an amount equal to what is being
withheld from your pay check for FICA (Federal
Insurance Contributions Act)
taxes. In fact double it to match what your employer is paying. Buy the ETF’s
(Exchange Traded Funds) SPY or VTI or VOO through a discount brokerage firm like
Fidelity or Vanguard.
Do this investing in addition to a 401K plan or other
retirement accounts that you may have.
The naysayers are going to react by saying what if the market crashes like it
did in 2000 and 2008 where the S&P 500 lost 50% of its value? Yes… That too is
going to happen, possibly more than once during your investing years. Take
advantage of those times by adding to your investments and a few years later you
will be rewarded.
one path for sustainable
financial freedom so that you are not dependent
on the government or anyone else for your financial security.
And if Social Security is still viable when you become eligible it will be a
bonus and you too will be
able to party like it’s 1999.