Your Finance and The Presidential Election
An American President serves a four year term. If re-elected he or she can serve a second term before standing down. The reality of the final year in four is that the two major parties, Democrat and Republican hold primaries, their convention when the candidate is officially selected and finally towards the end of the year there is the Election. The sitting President is certainly not a lame duck during the final year but little controversial legislation seems to be introduced for debate. Recently one of the nine members of the Supreme Court has died. His replacement is a political decision which can give one party or the other an advantage. Convention seems to suggest that this ninth member will not be appointed before the Election.
Of much more significance to the ordinary American is the stance that the various candidates are taking towards the Social Security System which is so important to those citizens that have made insufficient provision for their retirement. The System is in trouble with fewer people contributing, more wishing to take benefits and life expectancy increasing. By the mid-2030s there will be insufficient funds to maintain the present benefit levels. It has been suggested that that benefits may drop as much as even 25%.
The Republicans in general are opposed to increased taxation so it is no surprise that the major candidates for the Republican nomination are not supportive of the 60 million Americans currently drawing benefit, two thirds of which are workers who have retired and opted to start to take benefits. Those benefits were intended to supplement individuals’ retirement savings, not to be the sole funds people were to rely on. Unfortunately it seems that half of Americans will have to rely very heavily on what they can draw in benefits.
What are the options?
• Increased taxation
• Cuts in current benefit levels
• A combination of both
It is surprising that even though the subject is debated regularly, there is no agreed solution. The Democratic candidate will be either Hilary Clinton or Bernie Sanders and both appear to support increased benefits with the finance coming from the wealthier members of society. Not surprisingly the Republican view is somewhat different.
Ted Cruz and Marco Rubio, the two Republicans currently trailing Donald Trump, are basically looking to decrease benefits. Ted Cruz wants to increase retirement age and reorganize the way that increase are calculated. Marco Rubio is not altogether different while the likely winning nominee, Donald Trump, is not of a mind to increase hand-outs. Certainly the signs after Super Tuesday are the Trump will be the winner to face most probably Clinton early in the winter.
The problem is that the ordinary person is not necessarily financially skilled and Republican suggestions tend to require decision making that may be beyond the ordinary person.
It is an issue that could well win votes for the Democrats even though there is no guarantee that a Democratic President can force through changes in line with his or her ideas unless the Democrats have a majority in Congress.
The Need to Save for the Future
Things will not get better if individuals are not prepared to be financially responsible. The statistics are fairly worrying at present with a huge number of middle aged Americans having made minimal provisions for retirement. It is possible to start saving at any age but the sooner the better has always been the best advice. Those who are in middle age should start saving a minimum of 20% of their monthly salary. The real problem is that is such a difficult thing to do from scratch. How many people do you know that can suddenly do this without sitting down, creating an ongoing budget and making some fairly basic lifestyle changes?
• Do you have credit card debt that is costing you a high rate of interest each month?
• Have you a mortgage that is taking too high a proportion of your monthly income?
• Are you spending all you earn each month?
• Can you make savings and cut out waste?
An immediate way to reduce waste is to pay off any credit card balances with a cheaper personal loan with our realisticloans.com & credit approval networks. Such loans are generally available for those in regular employment who are able to make out a case for loan approval. When it comes to your mortgage it is more complex. Real estate investment can be very beneficial because you should ultimately have an asset that you can use in a positive way in later life. If however your mortgage is completely weighing you down you have to think seriously about selling and buying something more affordable.
Many have some very hard decisions to make on several fronts if they are to enjoy their later years. Relying on the Social Security System may be the only choice for some but it is an insecure position to be in.
When it comes to a straight choice between Presidential candidates some people are loyal to a party whatever individual policies it proposes. This time around there are commentators that suggest that some will not support their Party’s chosen candidate, likely Trump and Clinton, for reasons of their personalities or past histories.
Those in real need of financial help will look to the Party that is more likely to provide Federal help, the Democrats, or will they? Time will tell