Robert Valentine asked:

The “three-legged stool” is considered the basic model of retirement savings. It’s a metaphor that has been used since the late-1940s as a way to describe saving for your future. No one is quite sure how the concept was started, but it’s one that stuck. While the legs of the stool were different in the past (they relied heavily on other types of retirement options), today those legs have grown and transformed into a completely different kind of stool.

The problem is: most Americans don’t even have a complete stool, let alone a steady one. This can be attributed to many factors. According to the 2005 Retirement Confidence Survey (RCS), released annually by the Employee Benefits Research Institute, 31% of current retirees believe that Social Security will be enough to sustain them for the rest of their lives. You don’t have to be a government expert to know that Social Security may not last forever. Even if Social Security lasts, most agree that for the system to survive there will have to be some sort of benefits cut for future retirees. Essentially, that means one of the stool’s legs is a bit shorter and a bit weaker. Care to have a seat? Me neither. Those who have only relied on the one leg of retirement planning their whole lives may find that the stool will become a bit difficult to depend on in their later years. But this can all be prevented. After all, there are still two legs left.

The second leg in the modern stool era is a company pension plan. In May of 2005, United Airlines was allowed to default on its employee pension plan. It’s a move that will save the company millions of dollars, but will leave its employees looking for alternative sources of retirement income. Most companies today are switching to 401(k) plans, where the employer has the option to match a percentage of the contributions to the plan. 401(k) plans are more secure than pension plans and they have more rollover options, but employer-sponsored retirement funds are simply one more option in a plan that should contain several strong legs. You should work with a financial professional to craft a specific 401(k) strategy, including rollover options, so that you’re confident the second leg can bear some retirement weight.

The final and increasingly popular leg of the stool is personal savings. Sadly, many people feel they have no major options for future retirement savings. In times of shaky employer provided retirement funds and uncertainty over Social Security’s future, a real personal savings plan remains the strongest of the legs, but ONLY if you plan for your future. You’ve probably heard of IRA’s before, but can you name all the different types and which one suits you best? IRA’s are specific retirement funds set aside for you to save for the future. You can also fund your retirement by investing in mutual funds or any other form of securities you wish. Depending on your current financial situation, you’ll want to consult with a financial expert to decide what plan is best.

There are a few simple steps you can take to start exploring your personal savings retirement options. The first is to contact an independent financial professional who can council you on more options and details regarding your retirement. The second is to calculate your post-retirement income. Calculating your post-retirement income is one quick and easy way to start preparing for retirement. According to the RCS, currently, only 4 in 10 workers have done the simple calculating needed to determine a sufficient post-retirement income. Calculating your post-retirement income is easy and very essential to planning for retirement. Oftentimes, people don’t believe they’ll need a whole lot of savings to retire on. Sometimes, seeing the results can light a fire underneath your retirement plan and cause you to re-think your savings strategy.

One of the biggest mistakes future retirees can make is planning their retirement alone. While something can be said for a “can-do” spirit, trusted financial professionals are more likely to find better ways to help you save money for retirement. When workers were asked about the most helpful tool for saving for retirement in the 2005 Retirement Confidence Survey, the largest percentage of workers surveyed (27%), said they believed advice from a financial professional was the most helpful. Aside from post-retirement income, it’s also important to have some sort of long-term care outlook, in case long-term medical care is needed after you retire.

While Congress debates the future of Social Security, there is always hope the program will be saved and improved. But there are never guarantees in life or politics. Only you can decide what kind of retirement plan you’ll have and how comfortably you’ll be able to live in the future. If you choose to rely solely on Social Security, you may find the going to get rough in the future, especially considering inflation and rising healthcare costs.

If you choose to plan carefully with a financial professional, you have a personal say over your future, instead of leaving your future financial security in the hands of elected officials or employer-sponsored plans. If your retirement is filled with less worry and financial strain, you’ll have more opportunities to live out your days actively, rather than just passing time, sitting on your wobbly stool.

Alex Avram asked:


Ronald Reagan once said:

“Freedom is always just one generation away from extinction. We don’t pass it to our children in the bloodstream; we have to fight for it and protect it, and then hand it to them so that they shall do the same, or we’re going to find ourselves spending our sunset years telling our children and our children’s children about a time in America, back in the day, when men and women were free.”

As you may have surmised from reading any newspaper or watching any news channel, Socialized Medicine is shaping to be the issue of our day.

Let’s just correct a few misconceptions. Universal Healthcare is not “free”. Either you, your children or your children’s children will be paying for health care that you consume today. Look at it this way, would you rather trust your healthcare to you – who can go out and shop around for the best healthcare that you can find, from companies which need to compete against each other in order to provide the best service possible in a country with the best doctors in the world, or would you rather receive your healthcare from a single entity (the government) which is not required to run efficiently nor has ever show any inclination to running efficiently? Go wait in line at the DMV and picture yourself doing the same thing while bleeding, having trouble breathing or worse, experiencing symptoms which lead you to believe that you’re having a heart attack?

Just because citizens are uninsured does not mean that they cannot receive health care. Nonprofits and government-run hospitals provide services to those who don’t have insurance, and it is illegal to refuse emergency medical service because of a lack of insurance. In fact, the oath that doctors take upon donning their scrubs for the first time mandates just this action.

Like Social Security, any government socialized benefit will eventually be assumed that it is a right rather than a government provided social benefit. This makes it essentially impossible to ever remove. This isn’t a scare tactic, it is reality. With this in mind, why the rush towards socialized medicine? If it’s really permanent, then shouldn’t we take the time to know the pros and the cons of the system?

As I type this, Barack Obama is pushing to rush this through Congress without giving us, Americans, a hint to how he’s planning on paying for this. Is this what we want? Hastily-made decisions which are done for political reasons under the guise of altruism? Or would we prefer a decision made after all the facts are presented to the American people and we’re able to decide what we want after careful consideration of all pros and cons?

It’s important to get all the facts straight, which is why during these times is crucial to be as informed as possible. One area that you can do this is by partaking in healthy debate with your fellow citizens. One such place is a Political Forum – Political Hotwire. It’s the place where I visit daily and enjoy debating current events. Check em out.