A few weeks ago, I received a letter from the government giving me information about the pension I can expect to receive once I reach the retirement age. Part of that is based off of (mandatory) contributions I’ve been paying through my income taxes. There is an amount that I’d get using my current contributions and a higher amount assuming that I’ll keep making those contributions until age 65 or whatever it ends up being.
Those are certainly nice promises. But in this week where the US government is officially “shutting down”, it seems like a terrible idea to base your retirement plans on those promises. Governments around the world are running massive deficits and it’s not getting better anytime soon. They are all afraid to take long term corrective action because of the political price involved. Whatever is being done is so small compared to what needs to be done (cutting spending, increasing revenues, increasing retirement age, etc),
You Might Think This Won’t Affect YouA few months ago, we heard about the city of Detroit going bankrupt and I heard so many analysts and even friends and family saying that it wasn’t a surprise. Of course, motor city that is a century behind building those cars is going bankrupt. If I were you, I’d check on your own city before judging Detroit. It’s surely not in as bad of a shape. But if I told you that San Jose, which sits on top of the Silicon Valley explosion is also going down that road, what would you think?
Believe me, This Is Happening EverywhereIt’s happening in the US, in Canada, in Europe, in Japan and elsewhere. Excessive debt is creating a major burden and will end up resulting in broken promises all around the world.
The solution of course is to start building your own passive income sources as I continue to work on and do updates on. Don’t wait for the government to force you into saving… it’ll be too late.