One person in two turning 65 today can’t retire. With average net worth back to what it was 30 years ago, those that are following behind them are certainly no better off. If you’re one of the majority of Americans that see no way to make it through your retirement years, what do you do?
For openers, let me emphasize that all is not doom and gloom. There are viable solutions for most people. This week let’s start by looking at what not to do.
Don’t just do nothing. Understand that time can be your greatest ally or your worst enemy. Don’t put off the actions you need to take, not one day longer.
Don’t depend on government delivering 100% on its promises. The more you make in retirement the less you will get from government programs such as social security. Even if you’re making little or nothing, government is unlikely to pay you anything like what it’s promised.
- If you are getting or will soon be getting a government pension, expect 100% for the next 4 years, then 85% for the next 4, then 75% after that. If you under 55, expect no more than the 75%. They do not have the money. For the reasons I say this click here- link to Corruption blog
- As for Social Security, for any year in which you expect to make $100,000 or more (not adjusted for inflation), expect that within 4 years or so you get nothing. If you make more than say $50,000 expect to get about 75%.
- The monthly cost of Medicare is already indexed, running from about $100-$260 a month, depending on your income level. Expect those numbers to change dramatically. A reasonable guess is that those making over $100,000 (again, not indexed for inflation) will pay something like $300-400 a month within about 4-5 years or so. If you make less, assume about double what you’d pay now. Lastly, expect that these numbers will be indexed upward for inflation.
Do not depend on the advice of any professional financial “expert”. These people are, by and large, a disaster and the #1 reason why our middle class has been devastated over the last 10-15 years. I have a lot to read on my site, MoneySmartOnline.com, about this problem.
Don’t take on more debt. Not a single penny more! As for what to do about that debt, listen to my radio show this Saturday, November 3rd. I’ll be chatting with trusted debt expert, Gail Cunningham, Vice President of National Foundation for Credit Counseling. The show is Saturdays from 5:00 to 6:00 pacific time streaming live (link) and on 650 KSTE airing in the Sacramento area, the Central Valley and most of the San Francisco Bay Area. You can also listen to the podcast available the following Monday.
So that’s what not to do, in next week’s blog we’ll get into the specifics of what TO do.