Wait, You Want to Rely on Who for Your Retirement?

I heard recently on a Podcast that Derek Thompson, a reporter from The Atlantic, was proposing more Government involvement for helping Americans save for retirement. Because face it, we’re bad at savings and planning for tomorrow as we’re too busy living for today. My gut reaction though was, wait, you want to rely on who for your retirement?

Didn’t we already attempt to do this with a little thing called Social Security? And from what I can gather, it has been a complete and utter failure. It may have worked in 1935 when enacted, but if I’m solely relying on Social Security to get me through my Golden Years then I’ll be eating Government Cheese in a one room apartment wondering when I’ll meet my maker.

Social Security is predicted to run out by 2037, which is quickly approaching. This will leave hundreds of thousands of Americans without any form of retirement income, even though they spent years paying into the program.

“Social Security is predicted to run out by 2037"

What's Your ROI?

As a 34 year old working American who has paid social security tax for the last 20 years, I feel robbed. If I would have been able to take that money I paid into Social Security and invest it responsibly, I would have an account valued at close to $100,000 today. And with more than 20 years left in the workforce to go, the amount would surely triple, leaving a nice little nest egg for retirement. Instead, I will receive $0 after paying into the system for the majority of my lifetime.

Call Wall Street corrupt as much as you want, but those are the worst Returns on Investment I’ve ever heard. Not only is there no interest or return on my contributions, but the principal will have been wiped out too.

We need to stop relying on Government bodies to take care of us. To propose entering into another short sighted deal for investing tax payer dollars into the mismanaged hands of the Government is laughable.

If we’re going to be able to make the argument for taking the control away from the Government, then it begins at home. Retirement savings, compounding interest, and the best tools for financial freedom have to be taught...they just aren’t instinctual because most people fear the conversation or thought required to look so far in the future. They can’t wrap their heads around it. However, doing nothing is much more scary.

"The solution is there, but the excuses are much easier to make than changing your lifestyle."

Only 19% of Americans own a Roth IRA (one of the best individual tools for saving for retirement-which is why they cap you at 6K annually) and only 9% own a Roth in addition to some other sort of retirement plan other than Social Security. Unfortunately, that number needs to increase if we’re going to be able to justify that we’re financially responsible enough to get away from the grasp of the Federal Government.

At 6K every year, you only have to put away $500/month. Yes, that can prove to be difficult to many. But if you’re making $50K per year, the Government is already taking half that for Social Security...Money that you can essentially Kiss Goodbye.

So just try to match that...Start by saving $250/month. What would you have to sacrifice to make up for that contribution? Two Nights out at the bar? Packing a lunch everyday? Not getting the newest iPhone upon its release? The solution is there, but the excuses are much easier to make than changing your lifestyle.

But beware...by illustrating that we are financially irresponsible as a Nation, you will be at the mercy of a Government that has no ability to take care of you when you simply can’t earn another dime. And by then, it will be too late.

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