The Social Marginal

I know it seems like common sense and that you probably believe that you already are aware of your overall financial future, but are you really?  With this post I aim to pose that question to you, not necessarily give you a formula for an answer or a full plan to implement, but rather to motivate you to research and create such a plan should you not already have one.  I will assume that you’ve already dealt with all irresponsible debt before moving forward.

A good number of the members of the Baby Boomer generation are heading towards retirement age without retirement funds to support them in retirement, thinking they are going to just have to work the rest of their lives (see increased IRA contributions with age, etc. and consult a financial planner if you’re one of these people, there might still be a way ‘out’).  Then we have the GenXers who are hitting their thirties and for the most part (at least ones which work in the corporate world or are self-employed, which is the demographic I would be refering to) which have been contributing to 401ks, IRAs, and various other retirement programs for almost a decade now and if they continue responsibly to be on track to retire whether or not social security payouts are around when they hit 55 (or 59 if you plan on living a nice, long life).  And between both groups we have the issues with Debt to Asset ratios.

If you currently contribute to your 401k, IRA, have an emergency fund, and your assets equal a higher dollar value than your debt, then you are on a fairly good path and keep it up.  But the majority are not, and these people need to look into these options.  Whether you are working and 25 or 55, if your employer matches 401k or IRA contributions, take them, it’s free money.  If you don’t have an emergency savings fund for events that may come up, regardless of how great your credit available is, build one, I like to use six months of total expenses as a general rule of thumb in a high yield savings account.  Do you even have a high yield savings account?  If not, create one, send me a message at cinder@socialmarginal.com with your name and email and I’ll be happy to send you a code that will allow you to get a free $25 with a minimum of $250 opening deposit (ING is where I keep my personal savings and have had no problems with it), but there are many other banks and do research regarding the entire company rather than just the rate they offer before you decide on one to utilize.

Not many younger people realize how much money they’ll accrue over 20-50 years if they can just afford to contribute $25-$50 a week or even month to a high yield savings account with compound interest and all, do the math, you’d be surprised.  So if you’re still relatively young, you still have plenty of time to start building that future, but don’t wait (the earlier you start, the more you’ll have), do your research and do it now.  If you’re around 55 and still working, you still have opportunities to contribute to that will augment your social  security as well. 

If you’re 59+ and living off social security and no other auxilary income, well, hopefully you’re making it work, if not, try and find some alternate income that doesn’t add a lot of stress to you, like jobs working from home, and get at it (Sorry, not much advice on that one).

Not all that helpful, but there are a thousand articles (Google is your friend) that will explain what you ’should’ do and different opinions on it, this is just a reminder that if you’re not seriously planning for your future, you need to get off your butt and do it.  If you have a financial planning blog or article that you’d like to reference pertaining to this situation, please do submit it to the comments on this post for others to use.

Tags: baby boomer, finances, future, generation x, retirement plan

This entry was posted on Sunday, March 9th, 2008 at 8:11 pm and is filed under Money Matters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.