Crash

In speed driving courses, you are taught to look down the road for what might cause a crash, not right in front of you. A good life guideline, as well.

So, while we were focused on skyrocketing energy costs, maxed out loans and purchasing power, and an economic downturn, few seemed to note Kathleen Casey-Kirschling standing at the curve down the pike. Ms. Kirschling was the first baby boomer to file for Social Security.

FDR set up Social Security along the principles of a pyramid scheme, illegal in 50 states. New entries would fund existing members of the pyramid. When it was set up, 44 people were funding a retiree. Now, it’s down to three. The framers of the system failed to adequately account for the population trend fluctuation, longer life span and decline in average real income.

In terms of real life, what this means is the positive cash flow will soon end, as boomers take retirement, or even early retirement. That will bankrupt the system in short order unless the government finds other viable cash sources. A government that had to borrow money from China just to do the recent meager economic stimulus.

Many were relying on their future checks to live in their retirement. Did they think that would cover the rising cost of fuel to run their cars and heat their houses? To deliver their food and other necessities for decades to come? Costs are rising; benefit payments are fixed. Did they consider that those paltry checks might be slashed or eliminated when the chickens came home to roost? Or, did they put all their chips on the government knowing best? The people who don’t rely on Social Security for their own retirement benefits.

Speaking of realities, have you considered how the government will process a load of work that will almost double when the 70 million retire and want their benefits? They’ve seen it coming. Of course, they see April 15th coming every year. Have you ever tried to call the IRS helpline?

And, let’s not forget Medicare, Social Security’s evil twin. That has problems now. What do you think it will be like under the weight of retiring baby boomers?

The economic stimulus of “spend” is a buy now, starve later plan. Don’t rely on the government to plan for you. Earn now, save now, and invest wisely now. You’re deciding your future.