Last year about this time I received an official-looking letter from the Social Security Administration. It was my Social Security Statement. I opened it up and glanced over it. I asked my spouse (because he's received several of these over the last few years) if I needed to keep it. Since he said that it wasn't really a big deal, I tossed it in the trash.
On Friday, I received another one. This time I decided to review it. It looks like a newsletter and has a lot of explanation about what Social Security means to me and my future. There are two charts in it that totally intrigued me. One is my earnings record. This chart lists my taxed Social Security earnings and my Medicare earnings every year since I started working. The second chart is my estimated benefits. It lists how much income I would receive if I stop working at age 62, age 66 & 8 months (full retirement age), and age 70. Of course, the longer I work, the more I'll make. Believe me when I say that the amount I would receive per month at age 70 is pocket change. It certainly is not enough to maintain my current standard of living even with my new philosophy of spend less than you earn.
I look at this as another wake up call for me. I'm really going to have to put retirement savings on turbo charge!
So here's the plan.
First, the company that I'm going to work for automatically enrolls you in their 401K immediately at a contribution rate of 3%. Thank Goodness for that. I figure they must know my savings track record. :-) I'm going to commit to increasing my contribution to 6% by this time next year. That's the maximum they'll match. Also, I'm going to rollover my profit sharing funds from the firm I work at now into my 401K.
Second, on July 1, 2009 (the day after my complete shackle release) I will begin making the maximum yearly contribution to my Roth IRA.
What a wake-up call. How many do you think I need?
PS I was just talking to my spouse. He's advised me to put my profit sharing in a traditional IRA. He said I'll have more investment options.
Tuesday, November 6, 2007
Like fine wine...I'm aging
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4 comments:
I think the social security update is a great wakeup call. I just got mine a couple days ago. It's kind of nice reviewing how much you've earned over the years. I actually had a post months ago about how in 2003 that letter from the social security administration served as a notice for me to get on track.
Great post on your blog. Thanks for the comment!
If I remember correctly, I get one of those every year. As someone who has spent the last 16 years as a homemaker (and the 3 years before that as a student), my Social Security numbers are down-right scary. I've worked now and again over the past 2 decades but not enough to make my social security benefits large enough to buy toothpaste and soap each month. Thankfully I'll be eligible for my spouse's SS benefits instead of mine -- if there is any Social Security program left at all by the time I'm eligible.
I know what you mean, Elizabeth. I didn't work at all for two years after my daughter was born. Then the jobs I had when my kids were little didn't pay much. At that time I worked at night so that I could be home with my kids during the day.
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