Funding Retirement (2)

You became a retirement saver the day you collected your first paycheck. The proof is on your statement - labeled "FICA". But Social Security itself never has, and never will help you afford the "good life". Social Security was designed to be an income supplement only.

Pension plans and savings investments are key in retirement planning. The Social Security Administration will provide you with a personalized benefits estimate. If you're covered with a pension plan at work, the plan administrator can tell you what you can expect under the options in your plan. Subtract the amount of social security and pension benefits from the amount you estimate you'll need the first year of retirement. The result is the amount you'll need to save from other sources to cover each year of retirement.

Source: Schiffres, M. & Knestout, B. (1999). How to invest for retirement. Kiplinger's, p. 80.