It is a common question when investors review their retirement 
plan—should we include social security benefits into our 
retirement income projections?

It seems the closer an investor is to retirement, the more 
likely he/she will include social security benefits into the 
analysis. Younger investors, however, may feel compelled to omit 
such benefits. They must then become mavericks on the retirement 
front. The choice is yours, but before you decide the influence 
of social security on your future, remember the following points:

When Franklin D. Roosevelt signed the social security act in 
1935, he stated that social security gives some protection to 
American families. One reoccurring theme of his statement focused 
on assistance, not 100% protection. In the President’s words, 
“the law will flatten out the peaks and valleys of deflation 
and of inflation (source: http://www.ssa.gov).”

For many, the Social Security Administration has raised the age 
of full retirement from 65 to adopt a more stringent schedule. 
This may be an addition of a couple of months or a couple of 
years. The administration justifies the increases due to longer 
life expectancies and general healthier life styles.

For example, those born after 1960, your full retirement age is 
67. Going forward, we should ask ourselves “what other changes 
will be made to social security?” If you would like a complete 
schedule of retirement ages for full benefits, I recommend you 
visit Social Security's website at http://www.ssa.gov.

An opinion adopted by many is to consider social security in 
part the closer you are to retirement. For example, if you are 
sixty years of age and plan on full retirement in five years, 
you should consider an analysis based on your current projected 
benefits. Even with the proposed reform plans, preservation of 
benefits is a priority for eligible citizens age 50-55 and older.

If however you are thirty, it may be better for you to omit 
such projections. The result will be overfunded personal 
savings. Thus social security will be an added benefit and 
not the benefit.

Consider the troubling issues of the 2004 OASDI Trustees Report: 
future scheduled benefits for today's young workers could be 
reduced by 27% or more if amendments to the current plan are not 
adopted.

Young workers should take note of this report. Do not rely on 
social security and concentrate on personal savings.

In conclusion, you have a risky option—there is only one way to 
justify social security, don't save for retirement. If this is 
your chosen route, be prepared for difficult times ahead. 

Wardlaw's belief is that familiar life elements best illustrate 
practical investment strategies; not typical investment jargon. 
With that philosophy, the author assists financial planners / 
advisors, brokerage firms, periodicals, and other investment 
information syndicates create informative and entertaining 
articles. For comments and questions, please contact the author 
at  mailto:tools2invest@yahoo.com