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U.S. Treasury Bills 4.3%, and Gold 1.4% (Dow.com). When you look at these results you may wonder why everyone does not just invest in Stocks and Mutual Funds because of their higher annualized returns. The key fact that needs to be considered is the amount of risk tolerance. The overall return may seem nice but there is more risk involved and the returns can deviate from the average. With securities such as bonds there is not as much deviation and risk involved in the investment. As stated earlier when you are early in your retirement saving process and have over 10 years until you will need that retirement money it would be beneficiary to invest in riskier securities, to be able to capture some of those larger gains. Although when you are closer to your retirement age it is better to stay on the low risk side because you do not want to get caught on a bad year or two where the returns deviate in a negative way from the average returns.

For younger generations like Generation Y Social Security no longer is something that one can count on when planning for retirement. No standard definition for Generation Y exists, but analysts generally classify anyone born from the 1980's to 2000 as members. For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security have stated. Social Security cash flows will likely head back into the black in a few years once the economy recovers, but starting in 2015 it looks to stay in the red for the long haul, which was stated by the trustees in their annual report. With a current 9.5% unemployment, fewer Americans are paying taxes into the system and nearly 73% of Social Security filers are taking a percentage of their benefits as early as age 62, instead of waiting until the full retirement age (CNNMoney). The trustees report also stated that the Social Security trust fund will be tapped out by 2037. This has a major impact on retirement savings as you will no longer have Social Security as a guaranteed source of income once retired.

Looking at some key components it is easy to see why one might be unsure of the future of Social Security. Life expectancy is increasing faster than expected, in 1940, a 65-year-old man could expect to live another 12 years, today it's 15 years, and by 2040 it is estimated to be 17 years. The fertility rate is falling faster than expected also, from 3.6 children for a typical woman of child-bearing age in 1960, down to just 2 today and a projected 1.9 by 2020. The rate to replace the existing population is 2.1, so the rate is already below and expected to decrease. The elderly portion of the population is expected to rise from 12 percent today to 20 percent by 2050, which will cause an increase in the number of retirees from 34 million to 80 million. Social Security is a pay-as-you-go system, with each generation of workers paying the benefits of current retirees. This works fine as long as the working population grows faster than the retired population, but now that the trend has reversed, the system is simply unsustainable (National Center for Policy Analysis).

Not only does Generation Y have to worry about Social Security being there when they retire, but it also is predicted to be the first generation that incomes will not surpass their parents. The average salary has fallen 19% for 25-34 year olds compar