As I’ve discussed several times, I think it’s a bit foolish to count on government promises to fund your retirement. Most Western governments have important deficits, huge debts and will end up being unable to live up to their promises. They are slowly making some changes to things like the retirement age, tax rates and other measures. That being said, it’s not close to being enough. The fact is that in most cases, we really need to fund our own retirement.
The big problem of course is that the majority of the population lacks the discipline to do it. Most would say they can’t afford to do it but if you pay yourself first, you will see that no matter what your income is, you’re able to save a certain % of your money.
On the other hand, if I know that most Americans (and others) are not saving nearly enough, this seems like the only way to make sure that they have something saved up. Will it necessarily be enough? Of course not. But it would be a very good start. In the wake of all the recent scandals, I’m not sure adding more government involvement would maybe at some point everyone will agree that the current system simply does not work.
It’s Not Rocket Science
You start early, open a savings account, start adding money into that account every month and invest that money into a clear and established strategy (ETF’s, dividend stocks, etc). It’s fairly easy to setup.The big problem of course is that the majority of the population lacks the discipline to do it. Most would say they can’t afford to do it but if you pay yourself first, you will see that no matter what your income is, you’re able to save a certain % of your money.
It’s Not About How Much You Make
If you look at people that are forced to go bankrupt, you’ll see that some are high school dropouts with low income but you’ll also find athletes and execs that have made millions of dollars. It’s really not about having enough money.What Else Can Be Done Then?
The Australian government decided to take action forcing all of its working citizens to save a certain % of their salary every year. I have mixed feelings about this kind of solution but it’s not a terrible idea either. The biggest problem I see is that having the government get MORE involved in my retirement sounds like a bad idea. I’d hate the government to tell me how much to save, where to invest, etc. It’s just rarely a good idea to get more intervention.On the other hand, if I know that most Americans (and others) are not saving nearly enough, this seems like the only way to make sure that they have something saved up. Will it necessarily be enough? Of course not. But it would be a very good start. In the wake of all the recent scandals, I’m not sure adding more government involvement would maybe at some point everyone will agree that the current system simply does not work.
