I don't think it is very wise financial retirement planning to withdraw from the political debate on retirement security because you believe – in your forties or fifties – that you will never “need” Social Security or Medicare. Most financial planners will tell you that there are three pillars of retirement security: (1) retirement savings or annuity income, (2) social security, and (3) home ownership. If all things remain the same, it’s a safe bet that you will receive over $1 million dollars in benefits from Social Security and Medicare in your retirement. It’s a good deal for most Americans and a basic cornerstone of any solid retirement plan.
If prior generations realize that they have to work with Gen X rather than view Gen X as an ATM to be used to pay their benefits, Gen X may be able to force realistic across the board changes to both Social Security and Medicare that “shores up” the programs and gives Gen X a realistic look at what they can expect from these programs in retirement and a better financial target to aim at when it comes to retirement savings. In addition, if we know this information now, we can not only change personal saving and spending but also work on policies that make it easier to save these additional dollars now - when we are working (or retired early). A major problem that currently exists for Gen X is simply understanding what dollars Social Security and Medicare will provide in our retirements so we can plan and save now, when we have time to sock away the extra dollars that we’ll need to have in our retirement accounts if large benefit cuts need to become a part of our retirements. As many have pointed out, Social Security will be funded at 75% in 2037, however, that assumes that their won't be a push by anti-mustachian boomers for more benefits or further cuts to payments in to the system by tea partiers. Gen X needs to force the retirement security debate to happen now so we'll know whether we will need to amass an additional $100,000, $500,000 or a $1,000,000 to cover the basic retirement costs that our parents and grandparents have taken for granted that the government will provide.
Looking at this from an “ownership society” perspective, one of the things the 50 million members of Gen X do "own" right now is the right to receive the same Social Security benefits and medicare as prior generations. That is law as it is currently written. The programs are not properly funded. This isn't a legal question, it is a financial question. If we don't assert our personal financial interests in Social Security and Medicare, we are, in essence giving away hundreds of thousands of dollars. If the government can easily snatch 25% of Gen X's Social Security or Medicare benefits without a fight from Gen X, why wouldn't they also go after other retirement savings such as making Roth IRAs taxable in retirement? The “fairness” argument that we need to keep older generations benefits fully intact while slashing Gen X's because they have paid into the system 10-20 years longer than Gen X (and ignored their own generation's warnings not to expect Social security to “be around”) don't carry much weight with me. If other generations perceive that they can continue to take from Gen X without any problems, why wouldn't they take more in the form of expanded Social Security and Medicare benefits that will further erode Gen X's benefits and ultimately our personal savings. If you don't think that anti-mustachian boomers won't push to have their benefits enhanced after a few years of being retired without any savings, I think you are being a bit shortsighted. This is why I think it's important for Gen X to protect our hard earned personal retirement dollars from any encroachment by the political process and that we don't foolishly give away our Social Security and Medicare tax payments with getting anything - at all - in return. We cannot accept reductions in retirement benefits as a forgone conclusion. If we do, then we will get whalloped even harder than what is being currently being projected and it will be too late for us to do anything personal about it - because we will be too old.
Politics can play a big role in creating real retirement security (or creating more retirement insecurity) for Gen X. As a result, Gen X needs to get organized and motivated to defeat the guys targeting Gen X's pocketbooks - and some of them may be ourselves.
