I have never seen the Netflix series "House of Cards," but I understand Kevin Spacey plays yet another interesting character. I mean, can you really get a better (or a more complex) character than "Verbal/Keyser Soze" in "The Usual Suspects"? From what I hear and read, however, his latest character U.S. President Frank Underwood is a real piece of work.
Apparently, President Frank has taken on some of the sacred cows of modern American life - entitlements?
So, what are these "entitlements" ... and are they really entitlements at all?
Can you say Medicaid, Medicare and Social Security for starters?
Franks believes Americans have been crippled by these government "giveaways" that may have started out as "safety nets" for some but have become "hammocks" for all.
His message: You are entitled to nothing ... and nothing is guaranteed.
None other than Forbes picked up on this message in a recent article titled “Life Lessons From House Of Cards: "You Are Entitled To Nothing".
Especially for folks in or nearing their "golden years," Frank's position may be more than a little disconcerting.
After all, art tends to shadow reality.
That noted, Frank may be on to something. Social Security and Medicare are not “rights” in any legal sense.
Congress decides on the payout, and Congress can change it—or eliminate it—at any time. Truly, what Caesar gives, Caesar can take away.
What should you then do?
Personally, I plan without Social Security as part of my retirement calculation. Color me pessimistic, or at least less than optimistic, when it comes to things like the government "lock box" on Social Security funds.
Perhaps you, too, might at least consider lowering your Social Security payout assumptions. Against that backdrop, here are three suggestions from the Forbes article:
- Focus on "income" rather than some “magic number” as your lump sum retirement target. True, most financial planning is driven by creating a nest egg of a certain size. However, that number does not include market yields which in turn drive income. Cash flow is king.
- Consider investments you might have overlooked. For example, preferred stock and closed-end bond funds can good income producers if bought at a reasonable price.
- Consider an immediate annuity can be a smart method of converting part of nest egg into a safe stream of income resembling a pension.
Try taking a look at your financial future through the "no entitlement lens" today and your tomorrow may get clearer.
Consequently, you may just develop a sense of urgency to engage an experienced Certified Financial Planner practitioner and finally get your comprehensive financial plan created.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Forbes (March 20, 2015) “Life Lessons From House Of Cards: "You Are Entitled To Nothing"