Thumbs Up: Your Retirement Anchor

Physician's Money Digest, March31 2005, Volume 12, Issue 6

Example:

While you shouldn't rely completelyon Social Security income(SS; 800-772-1213; www.ssa.gov/retire2/index.htm) for your retirementneeds, physician-investors shouldn'tdismiss the solid foundation the currentSS system affords. There is discussionabout shifting to privatization, butthat shouldn't affect those currentlyaged 50 and older. The current systemprovides a regular income stream thatacts like an enhanced bond portfolio.Dr. Jane Doe, aged 60, hasearned over the maximum amountsubject to SS taxes (ie, $90,000) for mostof her working career. Her husband,whether he works or not, will be entitledto half of her basic benefit if it isgreater than the amount he wouldreceive on his own working record. Ifthey retire by age 66, their combined SSearnings are about $3000 per month.Thus, even with one spouse as a homemaker,they will receive about $36,000each year in SS benefits alone. This iscomparable to the earnings on an$800,000 bond portfolio of 10-yearTreasuries (at the current 4.2% rate).You should receive an estimate of yourfuture SS benefits in the mail each year,or contact the agency directly.