The Fiscal Cliff of Retirement

Author: Andrew Meadows / 24 Jan 2013 / Personal Finance

Are you as sick as I am about hearing the term “Fiscal Cliff”? Thanks media for killing me with that news every two minutes. Maybe we should rephrase it as the “Fiscal Apocalypse of Retirement”. Maybe that’s what the Mayan’s were talking about!

In all seriousness, people are going nuts. I have a friend who sold off all of his stock in Apple (which is his retirement) the week before the deadline because of crazy fear of said cliff. Here’s the thing. Your retirement plan takes something that Americans are no longer experts at. It’s this thing called “patience”.

Time + Patience = MONEY

We have officially moved into a “microwave society”—this term coined by my dear friend Chad Parks. We want what we want and we want it RIGHT NOW. In the game of retirement dollars, this behavior will—how do I say this nicely? Screw you over in the long term.

We need to talk.

No one—and I mean this—no one can predict the future of the markets (not even those pesky Mayans). You need to go about saving with the idea that the money you put away is untouchable. Don’t rob your future self. Your future self wants to have a great life when things are winding down. Put money in. Be patient. Don’t cash out for a new car or a house. And stop thinking that your house is a retirement plan. It’s not. Your retirement plan needs to be a separate entity that you love and care for and it takes PATIENCE!

Make a resolution. Stick to it!

There is a fiscal cliff of retirement (enter your retirement age here). If you don’t save, you will not be able to live comfortably. Depending on your age, Social Security may or may not be there for you—according to the Social Security Administration, it’ll be insolvent by 2034. Scared? And Social Security is not enough to survive on. You don’t want to have to choose between meals, medication, or a roof over your head!

So, what are you going to do in this New Year? I’ll tell you what I’m doing. I’m raising my contribution to 10% (which means I have a lower taxable income—double win!). I’m cutting back on frivolous things, and am securing my retirement future so I can sit on some foreign beach for the rest of my days, drinking wine and eating olives and cheese.