Tuesday, December 18, 2012

A Real Shocker

You may want to sit down for this one: A new study shows Republicans start saving for retirement earlier--and save more for retirement--than Democrats.  In a nutshell, Fiscal Conservatives start saving for their old age starting in their 20's and early thirties--while those on the Left tend to wait until later in life, when the opportunity to have more saved up is lost.

The study doesn't list specific reasons for this trend.  They toss out the usual factors: Republicans are "rich to being with", Conservatives tend to be more organized than Liberals and that the retirement savings trends match the individual belief in the role of government in our lives.  Personally, I feel the last of those reasons is the most likely explanation.

We should really give both sides credit for practicing what they preach.  Those of us in the Personal Responsibility camp would look pretty foolish if we were all reaching retirement completely dependent on Social Security and Medicare to get us through our Golden Years.  And those in the Government Can Solve All of Your Problems group would appear hypocritical if they didn't actually need those monthly checks to get by.

Imagine how different the Fiscal Cliff debate would be if early retirement savings were the norm for all Americans--and not just those of us on the Dave Ramsey plan.  Would increasing the Medicare eligibility age threaten to "kill people" as some alarmists on the Left would have you believe if all of those daily $4 Latte Mocha Grandes had been converted into mutual fund shares for all of those years?  How many people would be howling over limits on cost of living adjustments for Social Security payments if all those new car payments had instead been able to go into 401(k)'s?

What you would actually have is outrage over the proposed increases in Capital Gains taxes as more Americans would see that retirement savings eaten away by Uncle Sam.  And those who put away just 300-dollars a month starting at the age of 25 would be faced with their heirs getting hit by the new lower qualifying standards of the estate tax, because they would multi-millionaires by the time they hit 65.

Actually, we probably wouldn't be at the Fiscal Cliff to begin with--because early retirement savings would have given more people the financial cushion they would have needed to weather the "Great Recession" without government programs.  Of course, there wouldn't have been a "Great Recession" either, because you wouldn't have had the over-borrowing to purchase over-priced real estate that was bundled into the derivatives that bombed when people who didn't have any money to begin with couldn't pay their mortgages anymore.

So enough of talking about Fiscal Responsibility.  I'll let you get back to working on your budget--or picking up your $5 cup of coffee--whichever you choose.

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