Tuesday, October 2, 2012

Should You Save for Your Retirement?

from Tim Kelly's Cartoon Page

The traditional, and morally responsible, way to spend your retirement is to save while you are working and then pay for your own healthcare and other costs when you retire.

Lots of people are not bothering to same for retirement, they prefer to spend their money on all sorts of things.  I once thought them to be foolish.  But now I wonder if they haven't had the right plan all along.

If you save for your retirement, then you will need to pay for your own retirement.

If you don't save for your retirement, then the government (read that as: "other people") will pay for your retirement.

Since that is the case why are you saving?

Spend it now and force someone else to pay for your bills.

The government likes it this way, we're dependent on it and will be forced to do as they tell us.

If the government wanted to encourage personal savings (which also means loans for people and businesses), then it would have a low rate of  inflation and high interest rates.  A high rate of inflation means that dollars are worth less now than they were in the past.  If you save money, then all that you are doing is watching the value of your money lose value.  A high interest rate could cover for inflation.  A high interest rate means, for savers, that their saved money is increasing in size.  A low interest rate means that saved money will not accumulate.

Is the rate of inflation low or high? 0-4% over the last ten years And have a look at this.

Is the Fed's interest rate low or high? Very low.

Other than the moral case for paying for your own wants and needs, and the immorality of forcing someone else to pay for you, I'm not sure why you'd save your money.

And that's just they way the government wants it.

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