How Does Social Security Play Into Retirement?

How does Social Security play into retirement? Without knowing the exact amount of money contributed by Social Security, most financial planners will plan a clients retirement with only a slight portion coming from SS.

You know there is a lot of concern whether Social Security will even be in existence in another 20 years or not and at Merill Lynch we are not trying to make a statement of whether we will be here or not but we are certainly concerned for our clients and for our investors that it won't be enough to provide the retirement that they hope to have. And so although we take into account a potential social security income that they will receive, we want to make sure that our clients understand and are realistic about what that income would probably be and what their needs in retirement will probably be and often times those are two very different numbers. We help them to not only understand that, recognize that but then they to build up a plan and a portfolio of how they are going to make up that difference between what their social security might be and what their needs might be. There was a time when social security was the sole source of retirement income. I think for the generation that is just passing us, meaning that are now 80 years old and older it's been a terrific program and a real help and often times been the only source of retirement income. As the country has continued to grow and become more affluent we are seeing people live not only live longer, but trying to have a lifestyle that is somewhat similar to the lifestyle they enjoyed when they were working. That is where the real point of difference is, not just being able to put food on the table but being able to provide that similar lifestyle, what you were living prior to retirement. I think for the folks, a large section of the country that are quite a bit older in their 80s, its provided a real nice income based on their lifestyle and their expectation. For the baby boomers moving through we don't think it's going to be near enough to provide a lifestyle.

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