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Make Hard Decisions Now or Have Them Made for You Later

Vimal Kumar

You are a very normal, average American.

You know financial trouble is down the road – even a cursory look at what you’ve got in the bank and in your 401K proves that. But the thought of what it would take to fix things is just too much to fathom.

So instead of dealing with it, you put it off…again.

You put off thinking about it in your 20s because, hey, you had your whole life ahead of you.

You put it off in your 30s because you were having kids and stuff.

And you put it off in your 40s because now putting stuff off had just become a habit.

And now that you can smell retirement (chosen or forced) breathing down your neck, the only thing that’s changed is “later” has gotten a lot closer.

But don’t worry. I’ve got good news for you. You don’t have to make this hard decision now. Or ever.

One day, sooner than you think, the decision will be made for you.

You’ll get to retirement age, having done little or nothing to prepare for it. Social Security will likely be around to pay you something. Perhaps it won’t be the sum they are promising today (after all, the Social Security figures provided for you now at come with the footnote that, at current funding levels, there’s only going to be enough money in 20 years to pay about 75% of what they are promising today).

So let’s just say, for example, you get $2000 a month in Social Security benefits when you retire. And just for jollies, let’s further assume your spouse gets the same $2000 per month. Can you both live on $4000 per month?

Oh, but did I tell you you’re going to have to pay for whatever Medicare coverage costs at that time? And there will still be taxes, too. So, you’ll have a bit less than $4,000 per month. Maybe $3,500?

So, what’s the difference between what you make and spend now and that $3,500 figure? A little? A lot?

If it’s a lot, you’ve got the opportunity to make a decision. But you don’t have the opportunity to choose reality – its coming.

If you want the opportunity to shape your future, to make that gap between your working lifestyle and your retirement lifestyle as small as possible, you’ll have to make some significant--and likely somewhat painful--changes now.

Or you can live with whatever comes down the road.

Either make hard choices now, or have harder ones made for you down the road.

Your choice.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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