American Ideal – Everybody should be able to retire and make ends meet

I just read the statement “Everybody should be able to retire and make ends meet,” in the article, “Does America need a new retirement system?”

This is Euro-speak. It’s all about socialising your retirement savings to help out those that could not be bothered to save for their retirement. And it may well become a reality. It should read, “everyone should have the right to save for their retirement to make ends meet.”

I’m not talking about those who need out help through no fault of their own. I’m talking about people who chose not to take reasonability for their retirement when they could do so..

The full text is,

“Should we be rethinking our retirement savings system?

“It’s time to have a campaign like we’ve had in health care in this country,” says Karen Friedman, policy director of the consumer advocacy group the Pension Rights Center, “We need to recognize a basic American ideal that everybody should be able to retire and make ends meet.” ”

When was there ever an American ideal that everybody should be able to retire and make ends meet? Isn’t it the right to life, liberty and the pursuit of happiness? That’s all.

Just think about that and what it means.

Your neighbour can party all their life and when they retire they know they will be able to make ends meet by relying on the public purse. Now I know many people want more than that but right now 40% of the population already pay no tax. So who’s going to pay for all who partied on and in retirement will need to make ends meet? I’ll tell you its you, that’s who.

We all know families that spend their money as soon as they get it. Their the ones that are always going away on holiday, buy the latest cars and gadgets for their homes. You shake your head in dismay and wonder how they do it.

Well there are many, many people who did just that and will soon have to face reality.

You decided you would plan for your retirement. You saved your money and invested in your retirement funds. You made your car last you and lived within your means. taking occasional holidays and not buying the latest LCD TV.

Along comes the bear market of the century and everyone’s nest eggs have been devastated. You still have a reasonable sum of money because you had quite a bit more than your neighbour to start with as you saved some of your income.

Come retirement time you may be able to live reasonably comfortably, even after the bear market hit. But your neighbour may find it very hard if they have no retirement funds to fall back on.

Not to worry though because they will be looked after by the state using your taxes and your children’s taxes if….

“The basic American ideal that everybody should be able to retire and make ends meet” becomes a right.

The way things are going all over the world right now, it looks like your neighbour will get a bailout just like the banks did.

Those of you who were responsible and took care of yourselves will pay for those that didn’t. There is no way the governments around the world are going to let a whole group of voters fend for themselves after making bad life decisions even though they were told to save for their retirement.

So either your government taxes you or they make a grab for your retirement fund like Argentina did. Either way you lose.

“On Oct. 21, Mrs. Kirchner ended the suspense by announcing that the nation’s private pension system — with a stock of $30 billion and a flow of $5 billion annually — would become government property. To put that in words that Americans can more clearly comprehend, it would be as if the assets of all 401(k)s were suddenly swept out of owners’ accounts and into a single government account.”

Even though the first attempt at self funded retirement has failed after being hijacked by the wealth managers, banks and financial planners it should not be thrown out and a national savings scheme introduced. Good regulations, full transparency and stopping large financial institutions having control of large retirement funds would be a great first step.

It is political suicide to actually make people responsible for their life decisions. So some kind of national retirement fund is almost certain to be introduced. Likely as not the big fund managers (banks included) will be given the right to manage it and yet again the actual returns to those who pay into it will be very poor.

Take a look at the retirement plans in other countries. Australia has a mandatory 9% deducted each week from their salaries and placed in a tax advantaged investment account normally managed by a wealth manager.

Steve Sass, Assistant Director for Research at the Center for Retirement Research at Boston University says about the scheme,

“The problem: “It creates a moral hazard,” says Sass. The systems create incentives to retire early and low-ball (or hide) your assets so that you qualify for a higher Age Pension.”

He likes the Canadian scheme though.

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