Taking personal finance decisions; how to

Retirement planning (or for that matter all personal finance decisions) should be not only non-political, they should be non-emotional as well. That is what Americans are saying and many are disgusted by the idea that Social Security privatization has become such a politically-charged issue. (Related article: Americans want retirement security, not politics)

Any program that helps Americans save for retirement and generally improve their personal finances is good public policy. Unfortunately, that is not how the debate about Social Security is playing out right now. Ken Mehlman, the chairman of the Republican National Committee, openly tells fellow members that Social Security privatization is just preparation for the 2006 mid-term elections to turn out the base of conservative voters. (Related article: Support slips for personal retirement accounts)

Or in other words, drag the debate till then, divert the attention from Iraq war, unemployment, etc. and make Democrats look as if they are somehow an obstruction to Americans retiring rich on a beach in Florida - courtesy President Bush. In a February 11 memo, Mehlman writes, "...Social Security reform is not only good policy, it's also good politics...Support for PRAs and reform is particularly high among ticket splitters, swing voters and some groups that historically vote Democrat...Personal Retirement Accounts (PRAs) are popular with the GOP voters, swing voters and young Voters...widespread support is seen among traditional swing voters and non-Republicans...Turning out our base will be critical to success in 2006." (Related article: No net gain found yet for even younger Americans from personal retirement accounts)

There are even reports that some anti-gay Christian conservatives groups are making their support for Social Security privatization contingent upon pushing their agenda.

It is perfectly fine to support whatever you believe in but financial decisions should be taken with an analytical mind. Here are more tips on how to think about this issue as you make up your mind about opening a personal retirement account:

1. Any policy change related to Social Security will have far-reaching consequences in how Americans live their lives today and for decades to come.
2. Politicians who are pushing for these changes today may not be there a few years later to be held accountable for their actions. It is American people who will have to live with the consequences.
3. Emotions should be reserved for romantic situations. Not when you are trying to figure out your assets management strategy.
4. If you have a difficult time deciding for yourself, seek help from a professional financial advisor (they are very affordable, for example, if you have an American Express credit card).

Recommended article: Financial advisors advise Americans to stay away from personal retirement accounts