I don't really invest in the stock market anymore unless a 401K through my employer counts. I think it does, but it's not really money that I can touch until I'm much older than I am now. And even then, there will be hoops to jump through because 401K money is one of those things that is both yours and isn't yours simultaneously. For one, you can't withdraw any of it without paying a hefty penalty due to certain restrictions around age and hardship. Additionally, when you do finally qualify, there is a maze of paperwork that needs to be filled out and verified in order to start disbursements. Finally, the balance may be affected by whether or not you are vested. "Vesting" applies to employer contributed funds which may operate on a schedule. So, if the funds aren't "vested" then your balance may not reflect how much money that you actually have.
However, when I think about how our financial system works in this country, putting money into the stock market as opposed to putting money elsewhere doesn't seem to be an actual choice in the way that it used to be. The one caveat to this is if you are already somewhat wealthy and have privilege. In other words, you have a choice of one thing, not two. If you don't choose the one thing, then you remain exactly where you are at in life with no ability to pay end-of-life bills.
For example, I'm looking at the future, and how much end-of-life care costs out of pocket. My father is in a nursing home, and we pay roughly $7500 a month out of pocket that is issued from his estate. My father was a chemical engineer in his heyday, and his entire estate...all that he worked for in life...will got to a C.N.A. who gets a salary to wipe his tush and take care of him around the clock. For clarity purposes, I'm not complaining about this at all. This is how the system works. I will inherit nothing, and dad will be taken care of for the rest of his days. What is the alternative to this? Well...the alternative is not being able to afford any of this and being broke and then the system kicks in and dad gets put on Medicaid and he lives in a nursing home that accepts Medicaid. The end result is the same. He gets the care he needs and the C.N.A. makes the money to wipe his tush and take care of him around the clock.
My point: I either invest in the stock market now to be able to afford the $2,000 a week it will require to take care of me in the last ten (or more) years of my life and eventually go broke. Or I don't invest in the stock market and stay broke and in the last ten years of my life I get cared for in pretty much the same way. The difference is that private care as opposed to that paid by Medicaid tends to be better. I know that my dad's private nurse we hired definitely spoils him, and he loves that. I'm just glad that his estate allowed him this opportunity to exit life on his own terms and with a luxury that few others will ever be able to afford.
So, then my choice is a choice of one thing. I can either shoot for the better luxury care, or I can do nothing and end up with the Medicaid care. Because of this reality, there's really no downside to choosing against putting your money into the stock market. If you lose it all, you just end up poor anyway and on Medicaid. You would have gotten there if you had done nothing. It's the same destination you win if you decide to take a risk and lose everything.
This "reality" of how all of this works is so frustrating to me. Capitalism seems to tout its ability to provide choices to its subscribers. But when it comes to investing in the stock market, there is absolutely no choice for many of us unless we are already independently wealthy. At that point, you could choose to just sit on your cash, or you could choose to spend it on this or that. Whatever. It doesn't matter because your "end of life" years will be as luxurious as you want them to be, or they will be as terrible as you want them to be. But for everyone else in America, the default is only terrible. If you want anything else...you've got to risk it all. That is the only way to reach for something better. Your income will never be enough to guarantee that you can hire a care provider to pay for that level of care (It's basically $2,000 a week now...what will it be 20 years from now?). So, you are literally forced to invest even if you don't want to, because the default is just a standard line of "it will be terrible for you."
I'm not certain why our system is set up like this. Why did anyone think that this was a good thing, and that a choice of "one thing" is all that you get? Anyway, everyone who reads my blog should know that I'm no fan of capitalism, however, I do abide by its rules. I'm just choosing to air a particular criticism against this system that was put into place long before I got here. What would I think of the people who set this all up? I'd call them manipulative and evil. But, I'll play your game. I've got no other choice. I embrace my "choice of one."
The way things are going most of us probably won't have to worry about retirement.
ReplyDelete@P.T.: But that's just a choice of zero. My post isn't necessarily about retirement or no retirement. It's that the system prides itself on presenting choices and from where I stand, there aren't actually any choices.
ReplyDeleteThe system was set up by the rich to make sure the money continues to flow to them. They don't care about the suffering of people. They don't care about people. They care about themselves.
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