Failure Of The Great American Dream, Flaw #3: The Deadly 401k

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The cornerstone of planning for retirement has been to save as much as you are allowed to into qualified retirement plans, the most popular of which is a 401k.

First off, what is the point of limiting how much you can save into a retirement plan?

The answer: The government wants to limit tax-deferred income. They have a big budget and need every penny to fund it.

By creating a limit, Congress placed a glass ceiling on what we think is needed to save for the future. In psychology, they call this anchoring. In effect, Congress caused everyone to think that 10% was the maximum they should save from their income for the future, so we have never developed strong saving habits in the process.

But that’s just the tip of the iceberg.

A bigger problem is that the plan’s only chance to succeed is Continue reading “Failure Of The Great American Dream, Flaw #3: The Deadly 401k” »

Failure Of The Great American Dream, Flaw #2: Too Much Time

Millions of Baby Boomers have been exercising a lot of willpower and discipline over the past few decades in the name of saving for retirement. They had a plan to work hard for 40 years and then transition to what they really want in their retirement. They did what the government told them to, paying into Social Security and their qualified retirement plans (401k’s and IRA’s) every month.

They thought they were getting ahead. Many thought they would retire by now. Unfortunately, most of them are not any better off now than they were 15 years ago.

The problem? Continue reading “Failure Of The Great American Dream, Flaw #2: Too Much Time” »

Even Through This Recession, I’m Thankful For Living In America

As custom here in America, we reflect on our lives and are grateful for what we have at the end of November every year.  The pronouncements feel pretty cliche after a while with the never ending “I’m grateful for my family, my health and my job” shtick.

Maybe I’m just too idealistic, but I want to hear details and specifics about why someone is grateful for what they have.  I’m sure I’m not alone as I love being moved by someone’s heartfelt gratitude.

Holding myself to that standard, I never intended to write a Thanksgiving post because I didn’t think I had anything unique to add to the conversation last week.  That is, until I watched Continue reading “Even Through This Recession, I’m Thankful For Living In America” »

The Failure of the Great American Dream, Flaw #1: Lifetime Employment

In case you didn’t know, the Recession is supposedly over based on some report by the National Bureau of Economic Research. In fact, they say it ended in June of 2009. I don’t know about you, but nothing has changed in my world to show that the recession is over yet. Property values are still dropping, foreclosures are still rising, most people I know are still finding ways to stretch their dollar and everything is still tight.

The bigger issue right now is Continue reading “The Failure of the Great American Dream, Flaw #1: Lifetime Employment” »