Jun 1, 2022
When Old Age Comes, What Will You Do
Taking Care of Our Elderly Is Always Responsible Behavior
Every culture considers it a responsible behavior to care of one’s parents, particularly so when they cannot fend themselves anymore. However, fending for themselves is one perspective. Yet, financial support when they have become incapable is an easier one for that matter. I know that a good percentage of us will have challenges with that apparently easier part. It does not matter which part of the world you live; no employer adds parental care in wage calculation. It is your personal decision how you spend your money. Hence, when people look back to provide financial support for their elderly parents, they are not only praised for behaving responsible they are praised for their caring morality.
The first child of an 89-year-old will likely be more than 65 years old. It is going to be challenging for a 65-year-old person to be responsible for the physical support of an 89-year-old. I mean being there all day to cook, bath and walk the 89-year-old every day. That will be nerve-racking for anyone. Thanks to Medicine, scaling beyond 100 years of age is a common occurrence these days. It also means that the 65-year-old cannot be financially productive anymore. Therefore, financial provision for these two must come from someone or somewhere else.
Change is inevitable, they say. The healthcare profession has provided newer specialties and facilities to cope with the changing landscape of physical health improvements. Yet, the care and support they provide comes with costs. The solutions are not cheap by any means. We all have about 40 years of active physical activity, that is, by age 65, we begin to look at retirement with seriousness. Limited capital is forcing companies to heavily moderate offers of fringe benefits. Our world is certainly changing but the financial indices of the future are equally certainly changing in unpredictable ways.
But What Is Your Preparation
Preparation is predicated on your understanding the relevant financial indices in the first place, and then understanding the gradients and direction of the changes to manage them as they concern your person, family, and future. The image of the future is that of a compromised tripod with clear challenges to the retirement legs of social security, company pensions and personal savings. The retirement crisis is compounded by a spending crisis and education loans with no guarantee of appropriate jobs upon graduation.
Essentially, everyone gets committed to a life cycle of working to look presentable against the odds and believing that co-sponsoring their employer provided insurance program such as 401K and 403b will provide the necessary leverage when it is time to consider retirement. Sadly, even these inadequate offers are leaving the compensation discussion tables more quickly or being thinned down so rapidly that smart people learn to take charge of what clearly lies ahead.
Further, the wear and tear of these 40 years on one’s physical, mental, and financial health may produce irredeemable outcomes if adequate utility was not made of the opportunities and potentials that it provided. They grey hairs may turn out to be all talk and about severe pain as gain for experience. In fact, medicine is now confirming that if you make it to 65, you are very likely to see 89. And if you make 89, the chances are that you will coast 100 years very easily. Yet, the key lies in having a healthy lifestyle. Feeding yourself at 89, can be rather challenging. The experience has been that a poor knowledge of personal finance management creates a population of active spenders but passive savers who get too old before they think about it.
The standing truth is that there is a money problem. Even in the wealthiest country in the world as debt becomes a way of life. Everyone carries a credit card and a credit rating. The problem is not the credit card but the credit rating which determines how much you pay back for a every penny that you loaned. The rich can afford their premiums and so, they have a good credit rating, but the average worker is encouraged to pay a certain minimum regularly to maintain a good rating. That minimum ensures that he/she never truly gets off the debt roll. My friend feels good that the lenders are not troubling him, yet his indebtedness is never wiped out because he pays interest on the balances forever. That’s not exactly smart when tabled out.
Therefore, after settling in his job for about three years, a guy feels comfortable enough to take out a mortgage and move into his own so-called home. Between mortgages, student loans, car notes, alimonies, or children’s allowances, and/or maybe business loans, he can meander a daily living that appears sane for his status. Since, he has some 401k-type contributions, he feels relaxed enough to put retirement planning goes in the back burner for now. However, that apparent breather is the source of problems for the retirement years as he would easily spend the 30-plus years out of the 40 active years in this phase. It can be deceptive to think that after this phase, especially when the children may have left the home to start their own lives, one will have more money to spend on retirement plans. This is the dangerous financial trap that must be avoided by preparation as the living indices continue to reveal.
The Middleman Decides The Bottomline
Don’t leave social security fears to rumors. Government rules are not arbitrary company policies decisions. The laws can be tenuous to alter. Yet, such guarantees give one a good ground to make trustworthy estimates. They also confirm that it is going to be difficult for government to change rates and monetary expectations too quickly for one to react. Government laws don’t work like that. You will be warned if any largesse will change the current picture. So, just follow what they publish, and you can safely come up with what to expect when you get to that age. But don’t expect inflation bumpers catching up with social security checks. There lies the Catch-22.
As hinted upon earlier, the credit card and borrowing credibility scenario does not help either. This is because it soaks you in so much debt that recovery funds become hard to come by. For example, no North American bank offers savings interest rate of one percent. The average national interest rate is about 0.06 percent. Credit card rates compare at 13 percent. The margin is so much that you cannot outwit the bank.
Many have turned to investments in securties for promises of large returns from aggressive strategies to try to smooth the edges a little bit. That can be a strong pill to swallow because it is certainly very risky irrespective of age. If one is not retiring from the military or the government, and you are not a top executive, it is unlikely that you get a company sponsored retirement plan that you do not contribute directly into. Therefore, it is a savings vehicle rather than a company sponsored retirement plan in that respect. For those, who have it, any extra dollar helps. Therefore, it is smart to enjoy whatever the company puts on the table, those are extra dollars for your savings account. The educational point is that it is your investment, your money, that is paying for your severance pay in advance; it is not really a retirement gratuity. The total may be huge enough to set up retirement pension-type planning, but these co-payment plans are scarcely enough to handle one’s future needs in the prevailing climate of changes in the financial indices.
This is where the help of financial advisors comes in. The futures of everyone’s economy has the inflation rate as a constant in the planning process. Inflation must be factored into our investment vehicles. We have seen smart forward looking student’s scrooge up $1000 from their savings and investing it in the stock market grow it to say $40–400,000 by graduation. Many of them pull this money into their company retirement plans because of guaranteed growth potential that voids bank rates and IRS attention. Financial advisors know smarter tax-advantaged ways help these thinking young people with their money. The basic point remains that these smart people understand the slipperiness of future financial health and are taking action to prepare for it. They have proved the point and must be congratulated for it.
Even so, any vehicle whose returns fall below the inflation rate is not adding to wealth, it is helping the middleman, the vehicle whose commissions or interests or whatever it bears must be paid. To grow your money in a consistent and predictable way, it must be earning 7–14 percent in returns in the 2022 year. This is how to prepare for the financial surprises that the future may bring. You must be in control of the distribution of your money, not some middleman deciding commissions. Of course, your selfish interest must be personal profitability from your sweat.
Our objective at Adtools Concepts is to motivate, educate and empower people to take charge of their wealth and future by showing them the way to take out the middleman, who controls the distribution center of their money through our business proven platform. Ask us but at least talk to a financial professional about these potentials. Our counsel includes how to save for and build a wealthy future and making a sure difference.
