finances

Financial Good News and Bad News That Is Basically the Same

I have been reading a lot of really books lately on the state of the American economy, families, political culture and the like. Many of these books (and I hope to do a review on one I just finished called Squeezed by Allison Quart) discuss the problems and solutions that face Americans with regard to the economy and getting ahead financially. A lot of what they say I wholeheartedly agree with. I make no bones about the fact that I believe the government should create a social safety net for its citizens. I believe we should have universal health coverage. I believe that we should make it mandatory that people save for retirement. I believe in programs like Social Security, Medicare, Medicaid. I think we should at the very least have tax credits dedicated to child care so that people don’t have to struggle in putting their child in day care. We should get rid of the War on Drugs. We should have massive criminal justice reform in the U.S. I believe that public schools, including universities, should receive a lot more money and I am happy to see my taxes go up in order to pay for it.

I believe all of this and more. However, until we have a more enlightened White House and/or Congress these programs will most likely not be created. For those seeking to save for retirement that creates both bad news and good news. In fact, the bad news and good news is the same.

What is that news?

The news is that saving for retirement is on you. It is going to be your responsibility to take concerted efforts in order to do so. Social Security is not going to cover your retirement costs. Heck I won’t even really get social security (I think I will get $300 a month). No one is coming to save us.

Planning for retirement is on us.

That is bad news because I think we should have greater social protections for people. No one should go broke because of medical costs. No one should have to worry about whether they can eat when they are in their 70s.

Considering that the majority of Americans have less than $25,000 saved for retirement this should scare a lot of people. That is certainly bad news.

However, I think you can also view this as good news. I wholeheartedly believe that we can make a difference in our own financial lives. I believe that part of it is like learning a new language. I believe that if we come to understand the benefits of saving and how you really don’t give up that much by saving a few percentage points of your income toward your larger retirement goals that you can have a nice nest egg when you do want to stop working.

I believe that since retirement is on us that we can try to leave a larger legacy for our children and grandchildren so they don’t have to have as many struggles (hopefully a lot of the policies mentioned above will be passed) as I/we have today.

There is power in being responsible for charting your financial destiny.

And I am fully aware that there are significant barriers for some people to being able to chart that destiny (e.g. poverty, racism, good paying jobs, etc).

I am not some Pollyanna who will sit here and say everything will be alright if you just save money for retirement. I am not going to sit here and argue that it will be some panacea to solve life’s problems. Most likely there will be significant gaps between rich and poor, between different classes. The exacerbation of income equality over the last 3 decades is, in my opinion, the greatest economic issue that the United States faces today.

That said. It is still good news that you can chart your own financial destiny. That retirement savings is on you. I do believe that it is a double-edged sword, but it can be used to your advantage. You can turn it and make it a positive.

Hopefully, someone reads this and comes to the decision that they need to start saving, even if it is just a small bit for retirement.

Hopefully, someone reads this and comes to the decision that they should learn what the difference between a stock and a bond is.

Hopefully, someone reads this and will maybe start their first budget.

Hopefully, someone reads this and has the attitude that it is NOT too late or too early to be saving for the long-term, primarily retirement.

In some respects, it really does come down to the biggest mistake people make with money and that is not paying attention. I really believe that starting to pay attention to your money by tracking your spending, opening up a bank account, opening up a retirement account (401k, 403b, IRA, whatever) is half the battle.

Taking that responsibility is a good thing.

What do you think?

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