BY RUSSELL TURNER
LESSONS NEVER LEARNED
We Americans have become quite a paradox; we can be so informed and tech savvy about some things, and be completely ignorant about things that will have a direct impact on the quality of life that we will live in our later years. Too many of our people have never learned the skill of saving money. I feel that many of our people have fallen into the trap of relying upon the government to see to our needs when we get older. Ignorance on a subject can be bliss, but when reality sets in it can be downright terrifying.
All of my grandparents have passed on; but while they were alive they taught my parents the art of saving money, then they in turn passed that valuable lesson down to me. My maternal grandmother never held a job that was considered a high paying job but she always managed to pay her bills and still lay a little money back for hard times. Most people don’t understand that saving a small amount on a regular schedule can build up over a period of time, too many people are looking for a big jackpot at the local casino but those jackpots are few and far between. My grandmother also set goals and was willing to wait for something she wanted instead of demanding instant gratification. I recently read an article that should be alarming to people nearing retirement.
The National Institute on Retirement Security report looked at survey data the Federal Reserve collected in 2013. It is full of interesting analysis. We Americans are simply not saving enough to fund retirement. The median working-age household (age 25-64) has only $2,500 in retirement account assets. If we look specifically at people approaching retirement (age 55-64), the median retirement savings balance is only $14,500. The report concludes among the 55-64 age group, only 9.9% have minimallycomfortable retirement savings. That means some 90% don't.
Given that Social Security's long-term survival is far from certain, many Baby Boomers are postponing retirement. They have little choice but to keep working. This may not be so bad if you are healthy and you enjoy your work. The bigger problem is what happens when you physically can't work anymore.
We have developed a bad habit of focusing our attention on the here and now, but we need to start looking down the road a few years. My grandmother lived a healthy lifestyle and she learned to be a smart consumer. Spending your money wisely will save you money. Mathematically, spending less has the same impact as earning more. It is even better than earning more when you consider taxes. Forget the get rich quick schemes, go for the safe investments so that your nest egg can earn as much as possible without taking excessive risk. Above all, don’t assume that Social Security will take care of your future needs. When you boil it down, conservatism is nothing more than good stewardship of our finances. It is sad that many people never had the opportunity to learn the lessons my grandparents taught me. If more people had learned those lessons our personal finances and government finances would not be in the dismal shape they are in today.
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