Tuesday, October 19, 2010

It's National Retirement Planning Week!

This is a week set aside to remind Americans to plan for their retirement.

Regardless of what you think may happen with the Social Security Trust Fund (there are those who believe they will never see a dime of that money), you cannot plan all you expenses to be covered by the Social Security Administration payments. Have you seen the projected payments? On the latest worksheet that SSA sent me the projected monthly payment is less than my current weekly take-home pay.

There was a long piece this weekend in papers I read at the coffee shop. The numbers are staggering! An overwhelming majority of Americans have no retirement plan. The number was somewhere in the sixty-percentile. Of the people planning for their retirement, over half have less than $25,000 set aside. That's fine if you're young...

Thankfully, I have relatives who whipped me into shape at an early age to join my company's 401(k) plan as soon as I could. What's my plan for retirement? I want to travel and NOT have to meet with clients to pay for it!

Wherever you are this week, I hope you'll take a moment this week and look at your retirement plans!

Don Bergquist - October 19, 2010 - Lakewood, Colorado, USA


Anonymous said...

I think you are right in thinking that a lot of us have been short-sighted in not planning for our retirement. I think we maybe thought that the government would bail us out when the time came. I read a couple of days ago that the banks and Wall Street investors feel that they don't have any risk because the Fed has their back. When I read that I realized that the fact that the Fed protects the big guys does not mean that they will protect the little guys. I would like to think that the Fed has my back too but I'm afraid that might not be true.

Anonymous Reader

Anonymous Reader

Don Bergquist said...

Dear Anonymous Reader:

Thank you for reading and comment on my blog.

Yes, independent research has confirmed the fact that, on the whole, the US Public is woefully unprepared for retirement. There has been a strange shift in the reality retirement and the American Public, on the whole, has failed to catch-up yet. You must remember: Social Security was established in the height of the Great Depression. It was part of Roosevelt’s New Deal.

Ironically, the same persons on the right of the political spectrum, the people who call the president a socialist, and bemoan all the social changes that Roosevelt enacted as a part of the new deal, give lip service to the importance of maintaining the Social Security system; America’s cleared dalliance with socialism! But I digress…

Social Security was designed and intended not as a retirement plan, but as an insurance policy. The “FICA” deduction you probably see on your paycheck makes this plain. The letters stand for the “Federal Insurance Contributions Act.”

Remember that when it was introduced, most people lived shorter spans, and had their retirement paid for by their employers. Those days are, for the most-part, a thing of the past. Most employers these days have opted to allow their workers to self-finance their retirement through a 401(k) or similar plan. Most are eliminating or cutting-back on their matching funds butting even more of the burden for retirement on the retiree.

And if by “The Fed” you mean the federal government, you’re right, but for the wrong reason, I fear. By “the government” most people mean the people in the government. “Politicians.” Politicians are (regardless of what they might tell you) beholden to their financiers. It takes a boatload of cash to get elected these days. Just look at the television any time within a couple months of an election and this will become imminently clear to even the most casual observer.

And the Supreme Court decision that Corporations are people and therefore protected by the first amendment rights has only made it worse. Live in Colorado or any of the other states where the opposition party thinks they have a good shot at knocking out an extra seat in the house/senate/governor’s mansion, and you will see it clearly. I cannot tell you the last time I saw an ad that wasn’t for a politician or political cause. It has been MONTHS! Ad time is not cheap! (And I should know – it is my industry!)

All that money comes from people (or corporations, which according to the Supreme Court in Citizens United V. Federal Election Commission, is the same thing) and those people are going to want return on their investment. Corporations are not giving all this cash for nothing!

So no, you’re right. The federal government is not, on the whole, watching out for you. That is unless you have recently dropped millions of dollars into successfully getting someone elected!

Thanks again for reading and commenting on my blog.


Anonymous said...

I had forgotten that the people being bailed out financially are also often large contributors to political campaigns. In that way then, I suppose they've earned the money that they got. Too bad they don't use the money they get to create jobs. I've read what you have said about the mud slinging in the present election. If what I heard in the ads is correct then my state is going to send a very dishonest person to DC to serve in the Senate, regardless of which crook wins.


Don Bergquist said...

Dear A R:

Yes, it is a shame that they don't use some of their money to create jobs... but, then what is in it for them if they do?

Another difference between the world of the thirties and the world of today (besides the Depression, the New Deal, and the advent of Social Security) is the ever-growing disparity between the top and the bottom of the pay scale.

Time was when the highest paid executive and the lowest paid grunt at a company were separated by about a 100% difference in pay grade. Those days are a thing of the past. Todays new hires may be separated from the CEO by orders of magnitude.

The more the company can save, the more the person at the top can make. They have no enticement to create jobs when it is far cheaper to just send the work off to India.

As long as that is legal (and as long as Corporations are people, there is no reason that the politicians would care to change it) there is no reason for work creation here at home.

Thanks again for your message, Anonymous Reader!