During the Great Depression of the thirties the plight of the senior citizens, and also of a large proportion of the unemployed, became acute. Legislation was framed, introduced, and finally passed. Old Age and Survivorship Insurance had become a reality. One aspect of its operations will bear further scrutiny.
What is not generally known about OASI is that it was not designed to provide a complete and sufficient series of payments to permit "living off retirement income"; it was designed to prevent dependency and destitution and also to assist the unfortunate widow in the rearing of her children.
The implication here is that the citizen should and must have practiced at least some measure of thrift, so as to have accumulated at least a small amount of supplementary financial backing of his own. This should have taken the form of a home owned outright, or perhaps other income obtained by proper planning and farsighted investment.
Saving and Planning
This is the heart of any retirement program, for the program cannot be put entirely into effect unless: (a) systematic saving in some form has been practiced; (b) farsightedness has been employed so as to ascertain future financial needs and how to meet them.
It has often been remarked that there are many people who find it very difficult to save regularly. It is for them in particular that we suggest the use of some "forceful" savings arrangement. This may take one of the following forms: (a) automatic bank savings, whereby the bank will periodically transfer a certain amount from the commercial into the savings account; (b) regular purchase of U. S. Savings Bonds, perhaps by pay-roll deduction; (c) regular purchase of other bonds and/or stocks; (d) purchase of an annuity, even by installments.
It must be emphasized at this point that the wherewithal for carrying out planned retirement without worry is money and the way to save money is to accumulate it in some form or other and surrounding it by a restraining wall so as to prevent its use for any other purpose than that for which it was originally intended. Social security or other pension plans are made possible by enforced deductions from pay-roll checks. Should you want more than this minimum, then you must also provide some form of enforced deduction which will not be left to chance.
United States Savings Bonds may be purchased regularly by pay-roll deduction. They present a very high degree of safety and provide a compounding of interest feature which is valuable. Recent changes in their characteristics provide that they need not be redeemed at the expiration of their normal period, but may remain untouched for an additional period.
Still another alternative is to exchange them for government bonds which will provide regular interest payments semiannually. This means that a citizen of fifty may embark upon a program of regular purchase of these bonds with the expectation that those purchased in the beginning may be left undisturbed until the retirement date approaches.
We often hear the stated objection that such bonds do not guard against inflation. Granted - but neither do any fixed-dollar obligation. Even cash put into a strongbox is subject to the same inflationary trends. While the inroads of inflation are to be deplored, there is no dodging the fact that we cannot entirely avoid them. Nevertheless, the purchase of U. S. Savings Bonds combines saving with investment in a simple and very attractive package deserving of serious consideration.
As a "painless" way to provide future additional income it would seem that this expedient might easily be a part of the planned retirement of many.
With a little planning and forethought, you will have enough money to enjoy your retirement.
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