Social Security Debate & Retirement

Hey, I just happened across this debate about Social Security, its longevity and what could be done. It’s really good!

My take on it: the system has been woefully bastardized, and as one person said in this thread, money is being taken from working people’s pockets and not even returned at the end with a lick of interest. In the end, taking this money out and putting it in a high yield savings account would be better than the current setup. Nonetheless, this is a huge generational problem since the funding is based on the current contributions, not contributions made prior by the generation receiving benefits. What’s worse, is that we are essentially supporting the largest generation of Americans born to date: post-war baby boomers. Inherently, if factors like slow job growth, slowing of the economy, uncontrolled inflation and other similar economic big-hitters come into play, this could be the last nail in the coffin for the system as a whole. What will those people do without a pension from their employer? Not a damn thing.

That’s why its IMPERATIVE that everyone should contribute to a privately-owned retirement plan, be it a 401k, IRAs… whatever. It is unrealistic for anyone to depend on Social Security benefits at this point of the game; it is more or less a done deal. If you’re not doing that now, you better call your benefits administrator ASAP.

The best deal regarding saving to that capacity is to make it automatic. The less you have to think about it, the better. The money will simply be gone and you will learn to work with less. In actuality, if you are using pre-tax funds, you won’t see that much of a difference depending on the level of which your contributions are. A good book is the following:

The Automatic Millionaire by David Bach is a great book to learn good habits on saving and strategies on paying down debt. Nevermind that it talks about how to be a millionnaire. That actually happens to be an incidental effect. Real millionnaires are very simple people that aren’t ostentatious — not like celebrities you see in the tabloids. Those people are really living off of their royalties. If they are smart, and some of them aren’t, they would have a money manager making sure they are getting their things into investments that are growing at a good rates.

There’s my piece.

3 comments on “Social Security Debate & Retirement
  1. Ojea on said:

    baby, i get the impression you should develop a money management strategy tread, even if you dont follow it yourself… 😉 it might help someone else! but the SS issue is so inminnent for us and people a bit older too… so preparations should be made, even if it were not going to cave in on us.

  2. That’s the thing — part of my strategy is to get rid of my debt. Without doing so, I can’t truly save anything because interest costs eat into whatever savings can be accrued.

    I’m also waiting until June for me to be eligible for the office’s SIMPLE IRA, where I intend to contribute something like 10 to 15% pre-tax. It is a fine dance to make sure that both sides get satisfied.

    Believe you me, financially, I’m doing the best that I can right now.

  3. It’s funny, I have followed just about everything you have advised. 401K, research into IRA’s all that stuff….it’s working out. And I’m paying down debt. Not for nothing the advice you have provided as work out wonderfully.

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