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Retirement now offers security; it's up to you to pin it down

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TO a demographer -- someone who watches population trends -- the news about America's elderly population is very good indeed. ``For the first time in United States history, there is a smaller percentage of people 65 and over living in poverty than the rest of the population,'' says Peter Francese, publisher of American Demographics, a magazine out of Ithaca, N.Y. Today, 12 percent of older Americans are in poverty, compared with a national poverty rate of 14 percent, he says. In 1965, he says, the poverty rate for senior citizens was more than 20 percent.

This achievement was largely brought about without much effort on the part of the retirees themselves. The two strong supports of social security and company pensions have come together to give retirees a secure living standard. And since social security payments have been indexed to inflation (as are many company pensions), some retirees are even better off, because some inflation components -- home-purchase costs, for instance -- do not affect them.

While Americans can be proud of this accomplishment, they should not become smug about it. The next 20 or 30 years may hold as many bad surprises as the last few decades have provided good ones.

``We never knew 10 years ago where we would be today,'' notes Claire Longden, a first vice-president and financial planner with Butcher & Singer, a brokerage based in Philadelphia. ``We have no way of knowing where we will be 10 years from now. . . . For instance, there's a great disbelief in social security. I'm not sure it's going to be around in eight or 10 years. If I'm wrong, it's wonderful. If I'm right, it could be horrible.''

``Social security will be there in the next century,'' counters C. Arthur Williams Jr., professor of economics and insurance at the University of Minnesota. ``But it may be in a different form than at the present time. There are many financial problems that will have to be handled. The system looks secure, but it will have to undergo major modifications.''

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