In this new episode of The RevolutionFI Podcast, Tim discusses and explores ways we can be saving our retirement.
“So, the question is this: How can 50+ folks like us, honest and hard-working, how do we manage our current responsibilities and still plan for retirement? 401ks alone won’t be enough and we don’t have 40 years to save, so how do we leverage our experience and wisdom to gain financial independence? That is the question, and this podcast will give you the answers. My name is Tim, and welcome to the Revolution. The RevolutionFI podcast.”
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TGIF am I right? The kids still say that. They still say thank goodness, it’s Friday. And I got to stop with that joke. It’s terrible. It’s dating me anyways.
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I’m sure you’ve been thinking about yesterday’s episode and about what that means to start your own business. And yeah, let’s do it. Let’s take that first step. All right, so today’s hot pod comes from CNBC, but it comes via one of my favorite podcasts, The Money With Friends Podcast. So link in the show notes if you want to check it out. They covered it. I went and looked back at the original CNBC article, which was posted on October 27 2020. Let me give you the CNBC summary. And then I’ll give you some of my thoughts on this.
Saving Our Retirement
All right, a new retirement bill has perks for senior students and student loan borrowers. And if you’re not a senior or student loan borrower, that’s okay. Stick with me here. The summary, a new bipartisan bill would raise the age for required minimum distributions from accounts like 401ks, and IRAs to 75 from 72. It would also let workers repay student loans to get a company 401k match even if they’re not saving in their workplace plan.
And there’s a proposal called the Securing a Strong Retirement Act of 2020, proposed by Representative Richard Neal and Kevin Brady. And this is bipartisan. Neal being a democrat from Massachusetts and Brady being a republican from Texas.
So I think this is an interesting development. There are possible changes to retirement plan rules, and I think this is being spurred, of course, it’s being spurred by the pandemic. But it’s also related to this idea that I think especially Gen Xers, baby boomers, to a degree, but definitely Gen Xers are realizing we don’t have enough for retirement, that’s going to be a problem. I mean, I contributed the max matching funds to my retirement account for 23 years as a classroom teacher, and I don’t have enough like, based on what I contribute in and how it’s growing, and where I’m gonna win, I’m going to start drawing down on it, it’s not going to be enough for me and my wife to live.
That’s problem number one. The second problem related is that we’re all living longer into retirement. So retirement was a much shorter stage of life 30 40, 50 years ago, so not only are we coming up short on the savings, but we’re extending that retirement period.
So I’m not surprised that we have a Securing a Strong Retirement Act proposal in the House because this is going to become a problem. Boomers might be in a little bit better situation, because being a bit of an older generation, they had access to things like pensions, and, and, and more secure retirement options. But Gen Xers less so Millennials, even less than that. I think they’re gonna have to rely on themselves. I think Boomers are going to be able to draw on Social Security. Gen X or social security might might be there. I don’t know, Millennials, I don’t know all bets are off. Good luck to you on that. Who knows.
The Takeaway of Saving Our Retirement
But I think the big takeaway from this is that it’s allowing savers over the age of 50, to put more money in their retirement plans. There’s also a catch up contribution limit that’s being raised, which will hopefully help so I think there’s some recognition that we’re heading toward a retirement fund crisis. And I know, that sounds scary, and it might be for some of you. I know a lot of people I talked to, friends, colleagues, associates, many people don’t have a retirement account at all, or they borrowed against it, or they withdrew it for a major purchase. Or it’s severely underfunded.
I think we’ve all seen that statistic by now that the average American has less than $400 cash on hand in case of an emergency. So this, this retirement thing is looming. And if you are if you’re my age, if you’re in your late 40s, early 50s. And you’re looking out 10 or 15 years, retirement’s not that far away. What are you going to do? I think now’s the time to get prepared for it. And that’s the whole reason I started this entire podcast and, and and why I think RevolutionFI is important and I and I hope to help you with that.
So hopefully, that’s inspiring, not necessarily depressing. Things are moving, you have time. We probably don’t have time to save but we certainly have time to earn for saving our retirement. So let’s let’s stay on that.
Alright, hope you have Have a nice Friday. I will be back the next two days for some weekend reflections on Saturday and Sunday. So take care of yourself and I’ll see you then.
Transcription by Otter.ai, please forgive the bot for typos and mistakes.
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