Let’s continue our discussion about some of the pillars of retirement savings. If you ask me, there is a problem with all of the pillars, so there’s a problem with preparing for retirement for a lot of Americans.

The problem with pensions is that most companies don’t have them (unless you work for The Company: The Government).

The problems with 401(k) plans and the like are that so few businesses have one, and those that do rely on the employee to put in much of the savings (which they might not be able to afford).

Even if workers do put money into the plans, they have to figure out the investing (which many, if not most, have not).

Which leaves us Social Security as the last pillar to examine. I’ve done it before, but for a recap: They are not taking in enough money to pay what they have promised the American people. That’s a problem; and when you consider that many workers do not have access to a 401(k) or pension plan at work, it’s a big problem.

Now it’s time to move the discussion to the realities of families. To do this, I’m going to oversimplify things and create three groups: Lower-income families who just don’t have enough left over at the end of the month to be able to save for retirement and still live a life of at least minimal comfort; the middle-income group that can save for a comfortable retirement—but if “something” happens, this ability gets up-ended; then there are the high-income folks who can survive all those somethings and still end up with a comfortable retirement.

It should be noted that “comfortable” is different across the income groups.

The three pillars I mentioned are more important to the different groups. For instance, given their inability to save, pensions and Social Security are of vital importance for lower-income workers.

Middle incomers can augment that with personal savings through the 401(k) pillar, IRAs, and the like. To live comfortably, they need both. The high-income folks could see Social Security vanish and it not affect their comfort. They do, however, need to save a lot.

Because of this we’re not going to worry too much about the high-income folks. Though they’d like to get their Social Security, they don’t really need it for security.

And while they adore the tax savings of the 401(k) and related plans, they could still put away enough without them. If they don’t know or don’t want to know about investing, they can hire it out.

That still leaves well over 95% of the populace. Next week, we’ll start figuring out how to help them.

Mark your calendars for 9 a.m. on June 30, which is this month’s free Mindful Money webinar with my colleagues, Michelle Kuehner, President of Personal Money Planning, and Tina Haapala, our Marketing Manager.

They will discuss ways to evaluate your net worth, including the worth of your home and its contents. Sign up at www.personalmoneyplanning.com/events/being-mindful-aboutyour-castle.

Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.

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