BUZ LIVINGSTON: Investors dazed and confused?

Published: Saturday, August 24, 2013 at 03:02 PM.

Coombes closed her column with a link to an Economic Policy Institute report, “Social Security Is the Only Reason Most Americans Can Afford to Retire.” In 2010, the middle 20 percent of Americans had total retirement savings (IRAs, 401(k), etc.) averaging less than $35,000. To contrast, the top fifth of incomes had average retirement savings slightly more than $300,000. Social Security, on the other hand, provides retirement income more equitably.  The Social Security income stream for a typical family in the top income decile is around $600,000 while a family in the middle tenth can expect, on average, around $300,000 from Social Security. 

Many erroneously claim, like Page did with “Dazed and Confused,” they can beat Social Security. Since self-employed folk like us pay both sides of Social Security maybe we have that right. But when making portfolio withdrawals, the sequence of returns (market fluctuations) is critical. Social Security avoids market gyrations; only the dazed and confused ignore portfolio volatility.

For decades Social Security has minimized retirement income woes but it has evolved and changed over the years, too. When the weather gets cool, Social Security ripples through the South Walton economy.

Buz Livingston, CFP, has the only investment management and financial planning firm in the entire world headquartered in Blue Mountain Beach.  He helps clients along Florida’s Emerald Coast and around the country with financial decisions. Contact him at 850-267-1068 or www.livingstonfinancial.net. He’s a tweeting fool @BuzLivingston.



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