economy
Retirement security is in our hands
The average American adult can meet the challenge of ensuring a resilient retirement income even in the absence of a fiscally challenged Social Security program. At retirement, the individual must have accumulated an endowment fund that will be sufficient to provide an annual income for life that will be comparable to the individual’s earnings in the final year before retirement.
TL;DR
- Retirement security is achievable for average Americans without Social Security through personal endowment funds.
- Key strategies include contributing 15% of annual earnings for 40 years, targeting a 7.5% annual return, and limiting withdrawals.
- A recommended investment portfolio consists of 40% bonds and 60% equities.
- With an initial income of $75,000 and 2.5% annual inflation, the retirement fund could reach $3.4 million, supporting inflation-adjusted withdrawals.
- Fees and expenses can reduce investment returns, with ETFs for Treasuries and S&P 500 having low expense ratios.