Friday, June 4, 2010
The Importance of a Retirement Plan
We hear all to often, "Government will take care of it", "Change will Happen with New Presidents", "I will start planning next month when things get better financially or more time available".
The Reality is, The TIME is Now.Entitlement Programs like Social Security, Medicare, Medicaid, and now HealthCare Reform, has only put future generations in a position of Self-Reliance. Like what we've seen with past Pension-Reforms, the responsibility is now solely upon on You. Pensions are a thing of the past, Social Security is on the verge of being a thing of the past (unless drastic measures are taken now). Looking at Budget projections from federal to state levels, Medicaid is bankrupting states at a rapid pace, many of which will be completely broken in the next 10 years, or look at the Federal Level with Social Security & Medicare http://www.ssa.gov/OACT/TRSUM/index.html.
So start getting Tired of Hearing about it, the Time is Now to start Doing something about it.
This means, by starting a Monthly Budget. It does NOT matter how much money you are making or worth, this Budget pertains to each and every individual, family, or business. As you've heard on the show, "You can't take a withdrawal, if you haven't made a Deposit". Experts agree, you will need to save between 15-20% of your income put towards retirement, if you plan to retire with the current lifestyle you are living. Remember the days of Living the American Dream to someday become a Millionaire? Well, let's break down what 1 million dollars will provide you in retirement. Depending on your Retirement Plan & Retirement Vehicle of choice, you can expect if you should save 1 million dollars, that will equal in today's dollars (not 30 years from now, COLA-Cost of Living Adjustment) in today's dollars, that will average you a lifetime payout stream of between 50-70,000$ a year ( not adjusting for taxes).
So remind you, going back to previous blog sessions, Law of 72, At a 4% Inflation rate, that will mean 72/4, in 18 years, Today's 1 million will be 18 Years from the equivalent to 2 million. Granted, some will argue 4% is way too low, others will say based on current inflation rates it's high. Though when you factor in, Current Deficits of 13 TRILLION DOLLAR$, and the fact that each American in reality owes over 180,000$ towards that Deficit...maybe 4% is very low.
The point is, without all these numbers & hypothetical conclusions...It is important that you look at your next Social Security Statement, 3 months before your birthday you are by law to receive one. For those that are not eligible to collect for 30-40 years from now, notice in the FINE PRINT, how they already are Printing you will be receiving LESS than what your ESTIMATED benefit States...ummm...is there something I am Missing? NO!!! Fact is...at the pace our Government is Spending (Recklessly) maybe we should Start DEMANDING
OUR GOVERNMENT OFFICIALS, THAT THEY PUT ONLINE THEIR Balanced Budget...and if they DON'T! THEY WILL NOT BE ALLOWED TO TAKE PAID VACATIONS, HOLIDAYS, or BREAKS for that matter.Why shouldn't we demand this? When you can't pay your Bills by the end of the month, what are you normally required to do? Work Overtime, Work More Hours, Find another Job??? Use the Credit Card till its maxed out (WHICH ONLY PUTS YOU Further behind in life). Well our Government has no problems acting this way...so why shouldn't we?
The Answer: The Time is Now to Make a Decision, Take Control of your Future, Your Life, Your Family, and do what it takes to put a Written Budget & Plan in Place, on how you will reach your Goals/Dreams..Retirement, without ever thinking Government will EVER get it right!!! Ask yourself, when was the last time they did?
Plan Now & make sure you understand that your Vote does Count, Rep./Dem./Ind...we are in this together...as Americans as Friends Globally, the lessons of Countries past Greece, Japan, Argentina, Brazil, etc...etc...lets learn that Governments have only gotten in the way, but those that have succeeded was because they had a Plan that they Fullfilled regardless of outside influences.