Last night, we witnessed a once in a lifetime event. The
Cubs won the World Series. Even people who don't follow the sport - namely me -
tuned in to watch the game unfold. My Twitter feed conveyed all the nail biting
stress of fans in the best way possible, through memes, gifs, and hilarious
commentary; so I closed my laptop, turned on the television, and watched them
play ball.
The night wore on, and I switched the lamp by my bed off but
stayed up, tucked in bed waiting to see if a century-year-old curse would be
broken. On top of that, I wanted to be sure I was awake in the event of the
Apocalypse.
I didn't see the world end, but I did look on as the Cubs
made history. After I watched a couple of players be interviewed on the field,
I switched off the TV and fell asleep feeling happy for no particular reason. I
hadn't been a Cubs fan - or a baseball fan - but there's something magical
about an event like last night's game. It's hopeful.
This week, our topic has been retirement - saving for
retirement. Saving for retirement isn't impossible. We just have to make it a
priority and make use of the magic of compounding.
Today's throwback takes us back over a decade to 2005. Nancy
sent out a newsletter cautioning young people to make saving for retirement a
priority. She noticed the fragility of Social Security and warned those in the
younger age range not to include a dependency on Social Security in their
retirement plans. The system would need to be fixed somehow if it were to last
for them.
It seems dire. It seems particularly pessimistic if you
can't imagine a solution to the problem. But, last night should serve as a reminder:
a century long curse can be broken. Anything is possible. The Cubs just won the
World Series!
Enjoy our throwback!
I'm on the backside of my 40s. In my mind, I'm still 29, fit
and youthful and ready to take on the world. Of course, when I get out of bed
in the morning, my bones remind me they've seen a little more wear and tear
than the average 29 year old.
I'm slathering on more cold cream these days and reading
books on anti-aging techniques. I look for senior citizens who can be role
models, those who are still active and healthy well into their 70s and 80s. I
watch geriatric specials, looking for the key to health and longevity.
Meanwhile, I sit and wait for my AARP card.
I'm not sure how I'll feel when it appears in my mailbox.
I'll love the discounts. I'll appreciate the access to services and the
opportunity to be a part of a powerful lobbying group. But really... I can't be
that old. Then, I get my latest Social Security statement. I'm closer to
collecting benefits, and I know that, if any younger, my hopes of getting
anything out of this system would be nil. And then I think of the magic of
turning 65 and being eligible for Medicare. You know, being a senior citizen
might not be so bad!
Social Security is up for grabs. There's no doubt the system
needs a shot in the arm, but the sky is not falling... yet.
Those over 55 need reassurance their benefits are secure.
After all, it's a little late in the game to prepare for anything less. Despite
this, the upper earnings group may face an adjusted formula on the taxation of
their benefits.
For those of us still years away from retirement, Social
Security should be an afterthought. Yes, it's part of the mix, but we shouldn't
bank on it too heavily. The system was meant to be a cushion (a small one at
that).
Younger people should focus on building up employer plans,
using Roth and Traditional IRAs when possible, and learning to live within
their means as they prepare for their golden years. Plan for no Social
Security. If the system survives, you'll be that much better off.
As for privatization... it won't fix the cash flow problem.
To keep this going, benefits must be cut and/or taxes must be raised. There is
no other way around it. So prepare, and don't worry about getting old. When it
comes to Social Security and Medicare, the sooner the better!
--Nancy's New Perspectives Newsletter, Volume 41, March,
April 2005
"Social Security is a little like putting quarters into
a nickel slot machine."
