Does successful investing guarantee a successful retirement?
Not really. At least that’s the answer according to Evan Cooper, an editor for Investment News. Cooper is pondering retirement and has come to a surprising conclusion – at least we think it’s surprising, considering the source.
Cooper writes that retirement income “will come from a combination of Social Security and whatever pension you may have, plus the rents, dividends and interest earned on investments…” But he goes on to conclude that “the investment part really isn’t all that important.”
“Most wealthy people who aren’t heirs get rich from owning or selling a business or from earning very high incomes over many years and saving a lot of it, not from investing. Their investments are ways to maintain their wealth. For schnooks, investing can be the icing on the cake, but the cake has to be capital accumulation through saving.”
This is not a statement you would expect from someone who is presumably an experienced investor. He makes an important point. Money management and saving are crucial parts of retirement planning. However, setting money aside and contributing to voluntary savings accounts is much more difficult for those who can barely make ends meet. And that fact is rarely acknowledged by the business community.
Just a few weeks ago, the National Institute on Retirement Security released The Pension Factor: Assessing the Role of DB Plans in Reducing Elder Hardships, a report that illustrates the value of traditional pensions. The Pension Factor shows that pensions play a significant role in preventing older Americans from falling into poverty or requiring public assistance. Take a look at the statistics for more on why pensions are important.