[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]
[Continued from ARFS - Introduction - We owe nothing to anybody. Oops! National Debt]
As per conventional wisdom a comfortable retirement is built upon the three legged foundation of the following:
- Social Security: It is assumed to replace about 40 percent of the average worker’s pre-retirement earnings. That is a very significant portion! But alas! We cannot count on it anymore. (Oh! My Secured Social Security!)
- Pensions: Very few companies are offering pensions, some have already frozen their pension plans and PBGC is in red. (Tension With Pension)
- Savings: The only real option left for us.
Most financial advisers say that we would need 70 percent or more of our pre-retirement earnings to live comfortably. (In a future article we shall try to evaluate the accuracy of this statement.) Even with a pension, we still need to save. In absence of a pension, we need to save even more and start saving sooner.
Thus we conclude that The burden of securing our financial future is entirely on us as individuals and Savings with Planned Investing is the only pillar upon which such a future may be created.