Social Insecurity

I am not a licensed financial planner or broker of any kind, just a concerned individual that wants financial security and to share some thoughts about that with you.
My uncle recently retired from his job after 30 years working for the same company. My parents are already either semi retired or fully retired. And here I am, a thirtysomething, member of the once lauded "Generation X", contemplating my retirement options that are coming in the future.

This isn't to say that I have funds I can retire on now; I'm merely trying to anticipate what is to come for me and those of my generation regarding retirement. I believe most of you in the know are aware that our Social Security system is in trouble (how much trouble depends on which political party you ask). The reports I've seen basically have Social Security petering out of funds a few years after I turn 65. Great.

Fortunately, I've been saving for retirement on my own beyond Social Security and plan to continue doing so. I sincerely hope you have some kind of retirement savings of your own if you are still in the workforce. The options today are plentiful, and usually you don't need a huge amount to get started.
If you work at a job that offers a 401k plan, that is a great way to get going with retirement savings. The basic idea of a 401k is you choose to deposit a set percent of your paycheck into an account that consists of various mutual funds. A lot of 401k plans offered by companies include a match, which means that your employer also contributes an additional amount of money to your 401k fund. This match is based on a percentage of the amount of money you contribute yourself to the 401k. This is pretty much like your employer giving you a regular raise, or bonus. 401k plans will increase in monetary value just like mutual funds can increase, so your 401k will start to grow exponentially over time even if your employer isn't matching your contributions. Another advantage of the 401k plan is the contributions you make are not taxed until you withdraw them at retirement.

Even if you don't have a 401k plan available, you can try other options, like IRA accounts. There are a variety of IRA plans available, all of which have different advantages and drawbacks. IRA's usually have a required minimum amount to open one, so you may need to sock some money away in a savings account first before you can go this route. The general principle of the IRA is similar to the 401k, a collection of various funds (like mutual funds) that you can save money into until you retire.

The basic principal behind any kind of saving, retirement or otherwise, is discipline. If you're not saving now, you will need to train yourself to handle not having x amount of money a month. Figure out what you can save, and once you have gotten into a regular monthly habit of saving you will be on your way. I like the automatic deposit function that many investment plans offer. This makes it easier to save, since you don't need to think about writing out a check or making a manual deposit.

Once you are regularly saving, you can adjust and probably should from time to time. If you get a raise or another job that pays more money, start saving more into your retirement fund. This will only help you down the road. I suggest you keep an eye on the amount of money you have saved for retirement over time. Don't just forget it until you're ready to retire - the more you check your money along the way, the more chances you have to make sure your funds will be sufficient in your retirement.

I suggest strongly you speak with a financial advisor of some sort if you are considering starting a retirement fund or if you may want to make some changes to your existing retirement fund. I regularly consult with my financial planner and make periodic changes to savings I have for retirement.

The retirement system currently in place will likely have changed considerably by the time my generation has come to retirement age. Here's for hoping we can all find our way to financial security when that day comes for us.