esrosedotblog

VOLATILITY

I am not much into discussion about changing the Social Security structure. It seems to me that the 'goodness' of the system is intuitively obvious both for me and others.

I still believe that the bush-gooper campaign to change it is a diversion so we don't look at the other rabbits in the hat; the war, the corruption, the environment, the economy. You know, rabbits like that.

What is interesting to me is that, in my own case, I came to believe in Social Security only late in life!

I am retired with my social security monthly and a healthy IRA. I have always focused on the IRA but was also hampered in being able to save with caps and limits. I have to admit that I didn't put a lot away. When we had discretionary money we spent it. I don't regret that. We had a good time. But as the income disappeared with my retirement, the realities of my 'nest egg' came to the fore.

I was so cavalier about my Social Security check that I was going to delay taking it. That is until an adviser from the SSA took me by the hand and showed my why that was a stupid decision.

That was the beginning of taking my monthly check seriously. And once it started coming monthly, I have taken the stipend very seriously. Incidentally, this is my money. I always maxed out my account. I earned it. I am taking it. It is solid and dependable.

On the other hand, the IRA causes me more than appropriate anxiety. I have a good management plan and the assets are spread. But it is volatile. It is not constant. It rises and falls with the market. If my Social Security did the same I would be fucking nuts much of the time.

This article on the New York Times touches on this I think:
Social Security as Dramamine.

As one who has had a 'volatile' income for the last thirty years of his work life, I can relate to the following:

.......just because you earn $300,000 this year doesn't mean you'll be making that much 10 years from now. The economist Joseph A. Schumpeter, who coined the term "creative destruction," described the upper strata of society as a hotel in which the guests are always changing. Income volatility is the mechanism through which guests check in and check out.

No. Not that part. I didn't make 300,000; but I did check into that hotel room and then checked out.

If you work for yourself or are bonus based and are in mid-career, you should check this all out. Not only because you should have an opinion about the meddlers who want to change the one government program that works.

You should pay attention because you are checking into a hotel and will check out again and the wild swings up and down the elevator may make you 'car sick'. Your retirement plan including social security, as it is, will be your dramamine.