How Will Retirement Affect You?
Posted on August 25, 2006
The coming years, are going to produce more and more Baby Boomers who feel like Busted Boomers as the generation enters retirement and learns that in many cases, it sucks. The shock of discovering that those glorious and leisurely retirement years they envisioned often come with reduced standards of living and struggles just to make ends meet will truly make them feel like they are busted. The ones who lived it up during their earning years and failed to plan for the future, will learn that Social Security provides anything but security.
With major companies like Enron, WorldComm, Bethlehem Steel, National Steel and major airlines filing bankruptcy The US Pension Benefit Guarantee Corporation that provides partial protection to over 40 million workers, has virtually wiped out its entire $8 billion surplus. According to a May 17, 2005 CNN/Money article, traditional “Defined Benefit” plans are about $450 billion short of the funds required to pay promised benefits. With other corporations reducing or eliminating their plans, workers can no longer rely on their companies to provide for them in retirement. To make matters worse, daily we hear about looming problems Social Security faces when Boomers begin to retire. What’s a person to do?
Unfortunately, for many Boomers it may be too late to make significant changes before retirement, but for their children, the Echo Boomers or Generation Y, there is still plenty of time to plan for an envious life of leisure in retirement. Although virtually everyone is required to pay into Social Security and employers are required to contribute amounts equal to the employee contributions on most earned income, this government run program faces serious problems.
Imagine working 40 hours per week, 50 weeks per year for over 40 years and paying into Social Security the entire time only to learn that the retirement income you receive will do little more than keep a modest roof over your head and allow you to buy a few groceries. That’s the unfortunate fact Boomers face. Unlike their parents who saw the program come into existence and knew it was only a retirement supplement, many Boomers face retirement with Social Security as their sole source of income because they lived it up during their earning years and failed to establish investments that would provide additional income.
I point out this problem because it’s going to have a dramatic impact on the future. The payments today’s workers are making are paying benefits to people who made little contribution to Social Security and the problem is only going to worsen. I’m one of the first Boomers who will reach retirement age and I witnessed my own parents receiving more in their first couple of years of retirement than they paid into the system. The bottom line is that even if Social Security faces a crisis, our children won’t have to if they learn how to take care of themselves.
Here’s a tip! You can work all your life, live frugally and scrimp and save to supplement Social Security, or you can approach life the Weekend Millionaire� way. The last chapters of my book The Weekend Millionaire’s Secrets to Investing in Real Estate, contains eight exercises that each take about four hours to complete. Once a person performs these eight exercises, he or she will have done everything needed to be successful investing in the world’s greatest wealth builder, real estate. All that is needed is to continue doing these tasks over and over in order to master them.
If investing in real estate is scary for you, approach it like you did learning to drive. Remember that first time you got behind the wheel of an automobile? Your palms were sweaty, your heart was racing and although you may have been scared to death, you did it anyway. Then you kept it up until you became comfortable and eventually got to where you could eat, talk on a cell phone, put on makeup and perform a dozen more tasks all while driving down the highway.
Investing in real estate is much like learning to drive except for one thing; once you become as comfortable buying rental properties as you are driving a car, it will change your life forever. Ponder this thought; you work your whole life and pay into Social Security in hopes of receiving a small check when you retire. If something unfortunate happens and don’t make it to retirement, the government keeps all your money and you get nothing.
If you invest just four hours a week of your spare time doing the eight exercises I mentioned earlier and it takes you an entire year to buy your first investment property, chances are good that in 15 years just that one property will pay you more than the Social Security check for which you work your whole life. Imagine how it could change your life if you did this once a year for 15 years? You may be able to retire earlier with even more income than you made working, but the biggest benefit is that you would own the properties, not the government, and they would still be there providing income and security for your family long after you are gone.
I can give you the tip, but it’s up to you to get started. As the old saying goes, “Man sit at dinner table with mouth open for very long time, waiting for roast duck to fly in.” Sure, real estate investing can be scary in the beginning, but I don’t know of anything else that offers the potential it does for ordinary working people. What are you waiting for? Why not start today?
» Filed Under Success Tips Articles
Comments
Leave a Reply