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401k - the anti social security?

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With the social security overhaul in the news lately, it's hard not to wonder if it will stick around for today's working generation. Many polls indicate that the younger workers believe that social security won't be there when they reach their retirement age. That is a worrisome notion for many of us who have paid into the system for years and continue to receive periodic reports from the government indicating the entitlement amounts when retirement comes around.

The sad fact is that the government is in a real quandary regarding this pillar of our society. Government spending continues to rise and the deficit is showing no signs of waning. It is only logical that the law makers begin to examine social security and make drastic adjustments to keep the system from unraveling.

For years government borrowing has been the de-facto answer to the incessant annual budget short-falls. But one can not believe that this can go on indefinitely. The vicious cycle of borrowing can not continue to support our insatiable appetite and the foreign entities that have been buying up our debt for years could begin to rethink their strategies vis-a-vis their investments in the US. If the US were a corporation, it's debt load would be an immense worry to the investors. At some point new monies will dry up, leaving the country with a hefty debt with no new sources of funding.

This situation leaves the law makers no choice but to look at the current spending and curb as much of it as possible and social security provides a tempting target to that end. As the government begins to examine the current values held in retirement accounts such as 401k, IRA, and Roth, it could find justification in cutting or eliminating the social security program. The true tragedy here is that those of us who have been squirreling money away for our golden age might have been inadvertently digging a hole for ourselves in giving the government the justification to cut our future social security benefits, citing our alternate means of drawing funds during retirement. It will be an unjust treatment for those of us who have funded it all of our working lives, but when the going gets rough, it's always the working class who's left holding the bag.

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