Personal-yuck-Responsibility

Problem Transcendent

The US has two super-size problems. The first is a government budget big on instant gratification.

The second is an entire generation counting on retirement lifestyles far more expensive than their own resources can support.

Making progress on the first requires that we as individuals determine what our budget priorities are, make them known to the powers that be, vote that way, and convince others to do the same.

Solving the second means preparing for a shortfall of retirement money large enough to be perilous to families and society.

Political action can keep the hole from getting deeper, but it cannot magically replace the national savings that do not exist.

Your age likely dictates the most appropriate response.

Personal Action

We have no way of knowing how intelligently government will handle budget issues. As evidenced by the hard and-semi hard debt of $123,000 per US household ($14 trillion) and promiscuous public promises to dole out an additional $770,000 of taxpayer money per household beyond taxes already scheduled to be collected, government's track record of handling your money can be likened to "Enron on Meth" without seriously risking charges of being unfair.

So what's a family to do? Apply pressure to your government. Vote for officials at all levels of government who you think will solve this problem most quickly. If you enjoy being an advocate, convince others to apply pressure, too. Obviously, once "people power" hits critical mass, it works. MyGovSpending.com is doing its best. Be as smart on this topic as you can be. Getting change of this magnitude to happen through a political system that depends on agreement yet thrives on name-calling is, of course, a big maybe, although certainly not futile.

Bypass government. Prepare yourself.

How much money will you need? To have a reasonable chance of financing a bare-bones retirement at today's median household income, sock away the amounts in the table below by the age in the left column. Yep, it really does look likely that it will take $1.1 million to retire at age 67.

Don't have it? Earn more money until you do, even if it cuts into your leisure time. Skinny down your spending: Cut vacations, give up your cell phone, get by with one car, move in with family. Will you be happy anyway? That's up to you. Will this be a life changing decision? Could be. If you should save more but do not, forces are gathering now to hit you as hard as a fall off the Statue of Liberty.

Many factors could knock these numbers out of whack, not the least of which is how the aforesaid political system handles everyone else's retirement and therefore impacts your investment environment.

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