Saving for Retirement – Will You Have Enough?
3 Little-Known Factors That Could Affect Your Saving for Retirement
PinI don’t want to be the one that bursts your bubble, but even as we are saving for retirement, the plain fact of the matter is that many of us will be working until the day we die. I can hear gasps of disbelief, and yes, some are laughing at this silly notion.
We see the stock market at record highs, and even this fragile economy is showing some signs of recovery. So why the doom and gloom comment? I’ve been planning for retirement for a few years now, and have some money put away, so isn’t my retirement safe?
I wish that I could say yes, but there are many outside factors that come into play. The first problem is the social security system that our lawmakers have made a mess of. This system was set up to provide retirement benefits for workers that paid into it. Now, it is practically bankrupt because funds are paid out in benefits that have nothing to do with retirement.
Do you think our lawmakers and most US government workers pay into social security? No way, they have their own private retirement plan and when have you ever heard of their “Plan” being adversely changed? To top it off, many retirees from the government system take jobs in the private sector just to get in the required quarters of work and then collect social security in addition to their pension benefits.
There are going to be more drastic changes in the future to social security, and probably a cut in benefits that many retirees won’t be able to accept. The retirement age has already been increased and in my opinion, the monthly benefit decrease isn’t too far off. As these changes take place, is your retirement plan buffered with increased savings to cover this shortfall?[bctt tweet=”Three factors that could affect how you are saving for retirement…” username=”HBSMoneyTips”]
What about Medicare? The current administration has already set in place plans to cut Medicare payments to physicians and other providers in hope that this program may be salvaged.
The fraudulent payments from the Medicare system are in the billions of dollars and fake businesses continue to operate “business as usual” and steal funds that are needed for care for our elderly. But, do our lawmakers attack this problem?
Of course not, instead of trying to stop this fraud in a serious way, our elected officials continue to put a “band aid” on the problem. After all, it’s so much easier to cut benefits intended to help the elderly. Plus, if they came down hard on these thieves, it might offend them, and heaven forbid, violate their right to earn a living. What a sad and disgusting example of leaders of our country.
All of those factors mentioned above will have an adverse effect on our retirement. In addition, when you factor in that more retirees are living longer, it will take more retirement dollars to cover our expenses.
You can be certain that healthcare will be a major factor. Insurance carriers are already raising premiums in anticipation of Obamacare kicking in. These are really serious issues that were unknown twenty or thirty years ago when we began planning for retirement.
Many large businesses will no longer be able to afford a retirement plan for their employees due to the increased costs associated with Obamacare. Also, as employees feel the squeeze with increased medical insurance premiums and other medical care, they will be unable to properly save for retirement. Most will be forced to work longer if their health permits, and many others will probably try to find a part time job assuming the job market improves.
You don’t have to look too far or too hard to see how all of the above factors will affect our retirement. Inflation is much higher than current interest rates, another reason we will work longer, health permitting. Saving for retirement will take many, many more dollars than any of us dreamed.
I may sound like Dr. Gloom, but there are company sponsored retirement plans failing today, and home values are still down considerably. Even though our unemployment rate is allegedly improving, other countries are not so fortunate.
The same problem exists in many other countries throughout the world. How would you like to be living in Greece, or Portugal, or a few other countries that are in serious financial difficulty because of years of increasing debt? And yes, their problems will have an effect on us.
Individuals who were saving for retirement there have difficulty getting access to their money, assuming its still there. I hear comments from the elderly in other countries when they say that they must work until they die, and it is not a pleasant thought. We’ve been saving for retirement so that we would be able to travel and spend time with our family, but that dream is fading.
I’m not so much concerned for myself, but mostly for our children, who are a number of years from retirement. What have we left them? A social security and Medicare system that is in total disarray with little chance of improvement and questionable survival. They’re saving for retirement now and we can only hope that it will be enough.
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a major law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.
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