Sure, it’s a convenient news story when the HealthCare.gov website crashes and doesn’t allow people who desperately need healthcare to even enroll. News outlets continue to milk this story, probably because it shows government ineptitude when it tries to do actual business, and also because we all have Internet frustration stories.
Yet, even if the healthcare.gov website worked perfectly, it would not solve the far larger issues looming in our national economy as we try to figure out how to insure our nation’s populace at a reasonable price during a time when healthcare costs continue to skyrocket.
Far beyond the headlines about website crashes and the sticker shock that people are having when they see just how much they will need to fork out to be insured, are the realities that two gigantic diversions of funds will continue to grow in years to come, further slowing any economic recovery that even the most optimistic forecaster anticipates.
For instance, an estimated 14 million people who thought they could maintain their existing plans will now have to buy one of the government plans where the premiums are much higher than the existing policy they had. As a result, they will not be spending that money on food, clothing, cars or even debt. Then we need to take into the account the millions of currently uninsured Americans who get (and pay for) healthcare coverage for the first time, it’s good news for them, but bad news for the economy, as yet another drag on consumer spending is added.
Private individuals aren’t the only ones diverting money to healthcare. The federal government will be upping its contribution to Medicare and Social Security as the country’s population continues to age. Thousands of new retirees will be added to each of those payrolls every day over the next two decades.
Where will all the money come from to boost Medicare and Social Security and fund the many other entitlement programs that the government has bankrolled for decades? No one is really sure, but the Fed is not about to start “tapering” bond purchases as it continues to seek to kick-start a rumored recovery that has failed to gain steam.
The net effect for the average person who was thinking about retiring, but now realizes that s/he must continue to work? One vital action step for anyone within a decade or less of retirement age is a “stress test” for one’s retirement plan, using a variety of possible interest rates, economic growth rates and inflation/deflation scenarios.
That’s the only way to get an accurate gauge of how far your nest egg will take you, not the phony promises and projections of optimistic financial planners who still use historic rates of return that are unlikely to ever be repeated in our lifetimes. In fact, if the average retirement plan uses the interest rates that have reigned in the marketplace in recent years, most people’s retirement income plans blow up.
Don’t wait until the twin whammies of healthcare costs on a personal and governmental level begin to further slow our country’s economy. Plan now, wisely, so that you and your loved ones can have a statistically valid plan of action ready for whatever scenarios we encounter in the future.
Jeff Voudrie’s Updated Bio: A financial services industry veteran with 20 years’ money management experience, Jeff Voudrie, CFP® Professional, is a new breed of private money manager. Using sophisticated electronic monitoring and software, Jeff works with you to create a personal investments management portfolio that reflects your lifestyle goals and risk tolerance. He specializes in stable growth and prudent profits while applying robust, patented risk management processes. Jeff has been interviewed by The Wall Street Journal, CBS MarketWatch, The London Financial Times and the Christian Science Monitor. He is a former syndicated newspaper columnist and the author of two books: How Successful Investors Tripled the Return of the S&P 500 and Why Variable Annuities Don’t Work the Way You Think They Work. He accepts a limited number of new clients in his personal investments management practice. He and his wife Julie live with their seven children in Johnson City, TN. He is heavily involved in his local church and has done missionary work in Hungary and Cambodia.
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