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Monday, November 16, 2009

Book Review: America Welcome To The Poor House

I live in the state of Illinois and while I love this state the money problems it faces is not even funny. Just recently we experienced a bit of this first hand. I have 2 children in college and while we support them they also receive financial aid. When the MAP grant was cut we worried about what would happen. We stressed over this situation for several months and in the end the MAP grant was reinstated. That was wonderful but the worry for me is what is next?

The book America, Welcome To The PoorHouse by Jane WHite looks at situations that we face as Americans. As I grew up the older people looked forward to the days of retirement and freedom a time that they could do what they wanted to do. Now many of those who would retire and live as they please find their selves still having to work, not because they want to but because they have to. The baby boomers (3.4 million to be exact) will see retirment in 2011. The fate of these individuals unless planned for will be one of pension poor or pension less.

Jane White, a noted financial writer and president and founder of Retiremet Solutions, writes the warning loud and clear in the book America, Welcome to The PoorHouse : What You Must Do to Protect Your Financial Future and the Reform We Need published in October 2009. This is not the first time that Jane White has sounded the alarm bells. In 1991 she foretold the housing bubble and the risk cased by adjustable rate mortgages. In 2007 she testified before the Department of Labor warning the impending 401 K disaster.

Mrs White makes a few suggestions in her book America, Wecome To The PoorHouse. These suggestions include:
  • have both spouses work and save one income
  • choose a Roth 401 (k)
  • contribute the maximum allowed by law
  • develop a buy and hold strategy
  • avoid borrowing from your 401 (k)
  • rollover your 401 (K) to an IRA instead of any new employers plan

In a recent CNN poll 39% felt that they would be able to continue their current quality of life, 50% were confident they would meet their mortgage payment, 24% thought they would be able to send their child to college, and only 22% had saved enough for retirement. I think that many times we just put off retirement while we are looking at all the other things we face in life. Perhaps that is why it is very important that we check out Jane White's book America, Welcome to the PoorHouse

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