Your Social Security Statement

by Doris Dobkins
Doris Dobkins is the publisher of $mart Money New$. You can subscribe by visiting her web site at http://www.creativefinances.com

This week, I received in the mail my Social Security Statement. These annual reports are always very interesting to me as I'm anxious to know what the government will send me for my monthly income when I retire.

Here's an example of what a typical Social Security Statement might show:

If you retire at age 62, you'll receive about $500 a month.
If you retire at age 67, you'll receive about $700 a month.
If you retire at age 70, you'll receive about $900 a month.

When I look at these numbers, they really sober me up. My first thought is, could anyone live on $500 a month? My second thought was, can most people really continue working well into their 60's?

The more I thought about it, the more I realized that unless I had other streams of income supporting me in my old age, I could very well be in financial trouble once I hit retirement. I also realized that if I had ANY debt when I hit retirement age, it could be even worse.

Thinking about this scenario some more, I came to two conclusions.

The first conclusion I came to is that in order to have a secure retirement, one must be out of debt by retirement. This includes all credit cards, automobile loans and even your home mortgage. The only thing that could be excluded is an asset that would generate more money than it costs such as real estate.

The second conclusion I came to was that it would be critical to my survival to have some additional streams of income in place before I reach retirement age. This could be anything from real estate rentals, interest on notes, to an online Internet business. It doesn't matter where the revenue streams come from but only that they exist.

If you are worried about having enough money at your retirement to make ends meet and enjoy some sort of quality of life, I want to encourage each of you to take your retirement seriously. Please realize that every financial decision you make now impacts your retirement in one way or another.

Make informed choices when you spend your money. Understand the long-term impact a purchase will have. Look for additional ways to increase your income now and at retirement. A small investment now can make a huge difference for your future.