I've thought about that quite a bit. We're living somewhat hand-to-mouth now while I'm putting 15% of my salary into 401k so we'll be OK for retirement in 10-15 years. And I'm very concerned that my 401k will be the place those who didn't save will want to get their retirement income from.
It's called "stealing". Read "Mrs. Tyson's Fried Economics".
It's possible, but what can you do? NOT save? That'll show 'em, all right. :) I'm amazed at what it says above that 40% of boomers have saved, since my husband and I are above ten times that, and we still have ten years to go. I'm definitely funding my retirement accounts to the maximum allowed, and I think those of us who have will be prepared to "up the barricades" against raids.
Unfortunately, I think your fears are well-founded. When this big wave of Boomer retirees gets hit by a financial crunch, they will instinctively look for pools of money to raid and "redistribute." I'm not sure what the solution is aside from people saving more money. But what are the chances of THAT?
That's my biggest nightmare. What an untapped resource for future "wealth redistribution". Yikes. All that 401K money tucked away for the government to tap into.
That WILL happen as social security will be means tested and you will be penalized for saving (and counting on social security).
I have a defined benefit pension... So does my spouse... And we have soaked away quite a lot of money (any extra income went to savings)... But I still worry that I won't have enough...
I really do not understand the people in this article!
That is the way it works. You are a fool for saving.
I imagine that it will work like college tuition. They jack up the rates artificially and give grants to people who can not afford it.
That is a serious concern. You are putting the money away tax free. It grows. No one knows at what rate it will be taxed at when you begin to take it out. The Roth IRA is much better. However, it is set up so you really can't put in large enough sums to make a difference. They will take as much as they can from those of us that work.
Carolyn
You've got the right idea, you may want to bump up to 20% if you can though. Don't rely on your 401K alone, if your wife works outside the home, check and see if her employer has 401K or 403B programs. Sign up for the maximum contribution and shop around for employers who match at least part of your contribution. Max out on an IRA contribution every year. One more thing, pay off any revolving credit balance. Credit cards are OK as long as you pay them in full every month. Double up on your mortgage if that is allowed in your contract. The first payment is mostly interest while anything extra goes straight to reducing the principle owed. The ideal is to enter retirement without a huge debit load.
My wife and I are "DINK"s (double income, no kids) and we were both professionals with decent salary and benefit packages. We didn't start systematic savings until we were in our forties. In retrospect that was almost too late. The truth is start as early as possible and keep to the plan.
Regards,
GtG
It won't be boomers that take it from you; it will be Democrats. Bill Clinton's minions already thought of that back in 1993, but didn't get to implement it because they lost the House in 1994. Now that they have both houses and will have the presidency in 08, you'd better think about converting it out somehow and saving it. It's part of the largest single source of cold, hard cash in this country.....
If you can move that money offshore ... DO IT.
You know lately I worry about that too. What if they see our 401k's accumulated over forty years and decide we are undeserving.
You can guarantee that our socialist government will look at the "haves" like you that provided for themselves, decry you as having stolen it from the poor, and then take it from you and give it to others, all in the name of fairness. Kind of like the parable of the ant and the grasshopper, only the grasshopper has a gun to take the ant's food.
I know a guy from Sweden who had that very thing happen to him. Government took $60,000 from a retirement fund that he had accumulated, for the reasons I mention above. He moved to the US shortly after that.