I’ll soon be facing the all-important task of completing our 1040 return.  Just for fun, I ordered a paper copy of the instructions.  It’s come to the point where it’s actually a book of 100 pages excluding a pile of forms almost as thick.  I remember the time when J. K. Lasser was still alive and put out his annual publication to help people prepare their taxes.  It wasn’t much more than an orange booklet then.  At that time, the tax code was only a little over 100 pages long.  It’s now a library of documents.  Lasser died in 1984, but John Wiley & Sons bought his name for subsequent publications including one I authored at their request.

Our country is in unbelievable financial trouble now–and it continues to get worse as we delay taking the necessary bites out of Social Security, Medicare and Medicaid.  Instead, we added 12 million more people to Medicare this last year and now all of us Medicare patients have the opportunity to get a free annual medical exam and pay less for drugs.

I’ve talked to lots of doctors while riding the ski lifts.  Some small town doctors favor the increases in Medicare, but generally the larger city doctors dislike it, many saying that they are starting to reject Medicare patients because the compensation is too low, rules too tight and waiting times too long for the increasing number of elderly and the ever diminishing supply of doctors.  One doctor said that Medicare now wants the doctors to report which of the specified cost-effective treatments they have used with some unannounced penalty for not using one on the prescribed list.

I pity the youth of our nation who will have to take the brunt of all of this.  As it stands now, each already has over $50,000 share of the current national debt plus $300,000 share of the unfunded obligations for Social Security, Medicare and Medicaid.  Since only about 55% of the poeple who turn in 1040′s actually pay any income tax (and many who don’t pay actually get cash instead), it’s likely that the remaining 45% will continue to vote for politicians who will further increase their benefits.  It won’t be long until the non-payers are more than half of the voters as the Baby Boomers start to retire–most with insufficient funds.  One study found that only 4% of middle income people nearing retirement will have enough money to sustain them through retirement.  No wonder.  The national savings rates have been a disgrace for over two decades as people consumed more and “invested” in houses they could not afford.

Our generation has lived in the best of times.  I’m grateful for all of the opportunities available to us and our high standard of living.  Nevertheless, we have consumed too much, and now someone has to pay the price.  I seriously doubt if those who follow us will enjoy the same lifestyles for several generations.  My most common response to people who ask me retirement questions are to exercise, eat wisely, spend less, save more and work longer.  They’ll be very grateful later in life!

Bud