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THE BIG PICTURE
Although you’re young, it is not too soon to start thinking about retirement. Your generation faces a very serious risk of living in poverty in retirement or having to take a substantial reduction in your standard of living when you stop working. Just knowing about this risk is an important first step toward avoiding it. When you get a job, participate in your employer’s retirement plan as fully as possible. If you freelance, set up and contribute regularly to an IRA. Keep in mind that you may live up to 20 years after you stop working and will need to have sufficient financial resources to live comfortably. Federal entitlement programs designed to provide support for the aged are likely to have reduced their benefits while raising the eligibility age. Funding a comfortable retirement will be difficult, but not impossible. Start early!
PONDER AND PREDICT You’ve heard the saying: “Put your money to work for you!” Money is meant to work -- not sit around doing nothing. How do you put money to work? What are the tools of wealth building? ______________________________________________________ ______________________________________________________ ______________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ PRODUCT PREVIEW
DEBATE, PERSUADE, INFORM Speak Up on Social Security!
Social Security is a government entitlement program that taxes workers and provides the proceeds to retired and disabled Americans. Social Security is designed to provide enough money to retirees and disabled people to cover basic living expenses. The program takes a percentage of every worker’s paycheck and pays out the proceeds to people who are retired. Workers are compensated for their mandatory participation by receiving payments from the proceeds of the next generation of workers when they are retired.
Social Security is now at the center of a major controversy. The program faces serious challenges in the future. Americans are living longer. For several decades, the average number of children American families have has
Chapter 10 | Your Risky Retirement 184
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