Check out this CNN/Money article on aging baby boomers and entitlement programs.
I’m sure we as an economy are doomed by our inaction.
And yet, it’s by design.
Our forefathers purposely created our form of government to be at loggerheads most of the time, to ensure that change was slow and deliberate. I see the cool logic behind it, but I’m windmilling my arms to tell you that something has to happen. There needs to be a clear mandate about healthcare reform in the US because that’s going to be the biggest expense in our old age, not our housing. By then, my housing will hopefully have been paid for, but I don’t want to have to ‘eat the walls’ of my home to pay my medical bills and doctor visits as my body degrades over time. (When will desupport begin on the Mapgirl organic product? Will I be able to recycle it with the Soylent Green
I’d rather do something that’s a mistake than do nothing at all. I’m a person of action and movement. No, I don’t need radical change and I’m not advocating madness but something, anything. Call or write your government officials. Advocate change.
As for myself, I’m not saving enough. I’ve known this for a while, but my new raise kicked in on Monday which will appear on my first paycheck in February. I have been thinking a lot about saving 30% of my salary and how to achieve that. Right now, I’m saving ~19% of my salary. With a small bump up in my 401k contribution, I can get to ~25% when the new salary starts. (I am including my medical FSA in this figure because even though I will spend it, once my large expenses are finished in 2008, I will be banking all of the extra without feeling like I’ve missed out.)
So the new strategy?
1) Increase 401k plan contribution by a few percentage points. ~17%
2) Continue Medical FSA savings in 2008. (Next up: Laser eye surgery!) ~7%
3) Continue automatic savings. ~2%
Little by little. Bit by bit.
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Honestly, I accept the fact that I will never see the FICA contributions taken out of my paychecks for the last 12 years (and the next 35 years at this rate). However, I don’t think that I’m losing out on those contributions and here’s why:
My parents are paid hourly. My dad is a local truck driver and my mom works at a hospital. My mom MAY have a pension, but my dad pretty much has nothing. What does that mean?
My taxes will be financing my parents “retirement”, since they wouldn’t get one any other way. Sure, my money isn’t going into a bank account created by the SSA specifically for Mr. and Mrs. Dude, but I like to think it’s going directly to them. Oh, and to my Grandma too.
It is a scary situation. I just finished reading “why we want you to be rich” by Trump & Kiyosaki, and their analysis of the economic situation is also very frightening. I do believe we can work together to solve our financial problems… the truth is the answers are out there… but it all starts with some financial education. I’ve enjoyed your posts. Great work.
My rule of thumb is that that Social Security will not be there for me when I retire. Infact I think when I retire, the Social Security program will be studied like the manifest destiny policy of the 1800’s.
So I made the decision to max at least 401(k) contribution about a year ago.
Funny thing is I got one of those social security statements a few weeks ago. Says I am eligible get a little over $1900 a month, if I an retirement age. I’ll believe it when I see it