What's next for retirement savings?
Filed under: Retire
With the stock market down so low, it seems to be a perfect time for liberals to push their ideas of government control of everything. Retirement funding is a perfect target. Doesn't it sound great to think that our government will take care of you until you die? After all, why make consumers responsible for taking care of themselves? That would cost them money! And they can't possibly be expected to save their own money!Consumer are victims, after all, of something called corporate greed. Or so you would be led to believe. And the government must step in and save us! We won't talk about government greed, though. We're supposed to ignore the fact that our government forcibly takes away an ever-increasing amount of our money through personal incomes taxes, Social Security and Medicare taxes, sales taxes, property taxes, corporate taxes (which ultimately are paid by consumers), and every "fee" that is really a tax in disguise.
Argentina recently took away private retirement accounts to pay government debts, promising to take care of citizens in their retirement years. But what about the citizens who didn't want to be under government control for the rest of their lives? Too bad for them.
In America, academics are saying that there was an "experiment" done with 401(k) accounts and it failed. Who judges whether it was even an experiment, or whether it failed? The government gave taxpayers an incentive to save for retirement (tax-free contributions to retirement accounts) and some consumers saved enough, while others didn't. That doesn't mean that 401(k) accounts themselves are a failure.
Does this purported "failure" mean that consumers can't possibly save enough money to care for themselves in retirement? Of course not. People choose how much to save and how much to spend. If they want more money for retirement, they should save more. Consumers make choices each day. Eat out or save? Buy a car or save? Smoke cigarettes or save? Buy a house or save? I'm confident that the majority of consumers could support themselves in retirement if they made better financial choices.
What we need is not more government control. We need more consumers to take more responsibility for themselves and the families they choose to create.
Americans must come to terms with the idea that they'll have to work longer than they have in the past. We are living longer than before, so we either need to save more or work longer, or both. What's really wrong with an older person working anyway? Of course there are certain jobs that wouldn't be ideal for this because of the level of physical labor required or other limiting factors. But there are plenty of jobs that can be done well by older workers, so why not?
The answer to the issue of retirement savings is not more government intervention in our lives. I'm not confident that Social Security as it looks today will really be viable by the time I retire. I'm planning accordingly. Doing away with 401(k) accounts in favor of even more government responsibility for taxpayers won't make me feel any better. Look at the financial mess our local and federal governments are in. Do we really want them taking on even more responsibility for us?
Here's a radical idea: How about if the government stops taxing consumers so much, allowing them to save more of their own money for retirement?
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.



Reader Comments (Page 1 of 1)
12-23-2008 @ 6:46PM
Pat said...
Amen to all of the above!
Reply
12-24-2008 @ 12:00AM
Karen said...
Remember that the boomers' parents are the only generation in the history of mankind, in any culture, that stopped being productive 20-30 years before their death. Boomers are not fated to "work longer than they have in the past"-they may be fated to work almost until disability, which was the norm throughout history until the current generations of seniors. And boomers' parents are the 1st generation of grandparents that have not cared for their grandchildren in exchange for being supported by their children (in this case, via Social Security). Boomers haven't saved enough because they are the 1st generation in history that has had to support their parents and pay for child care!
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12-28-2008 @ 9:32AM
John said...
Boy, are you all wet. Greed and no oversight has put this country and most of the rest of the world in the worst financial crisis since the depression. Taxes have not been going up but certainly should go up to pay for the reckless spending of the last eight years. I grew up dirt poor and have managed to save enough (outside of screwed up Wall Street) to provide for myself. Not everyone has been that lucky. I have watched my kids struggle to find decent jobs with no way to save the money that I did. We have allowed our government to cater to the influential rich and corporations to their own ends. The american public has been forgotten.
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1-13-2009 @ 10:48PM
Valeria Christiansen said...
The 401(k) system is f****ed. I work hard for my money only to see it evaporate faster than I earn it. In my opinion the 401(k) approach to retirement makes all American workers hostages to the corporate system, the idea in essence being that we must maintain and support it, or else -- in other words, we as individuals will only "do well" in our old age if the corporate system does well. And when it doesn't do well, as it isn't right now, well, looks like we just have to eat it. I am an educated person, but I have neither the ability nor the inclination to mess around with investing. I resent mightily having the whole bloody burden of choices and decisions about investments put on me -- it's like cruel and unusual punishment -- such that it's my personal fault if I don't get filthy rich playing in the stock market with my 401(k). On top of that, EVERYBODY KNOWS that the stock market -- where we are REQUIRED to "invest" for our retirement, through mutual funds -- is a f*****g CASINO. Hello! Aren't CASINOS where you go to GAMBLE????? They force us to GAMBLE with our old-age security!!!! TALK ABOUT CRUEL AND UNUSUAL PUNISHMENT!! (which is UNCONSTITUTIONAL!) I hate it and I am totally cynical about it. I will probably have to work until I drop, and never have any retirement. The monthly check from the 401(k) may pay my electric bill or dry cleaning or something small like that. I do expect Social Security will at least pay my rent. NOBODY MESS WITH SOCIAL SECURITY-- it's all there is between us and being dirt poor and homeless in old age in America.
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