SiCKO Underscores The Need For Personal Savings

One of the heartbreaking moments of Michael Moore's SiCKO is when one of the September 11th rescue workers he takes down to Cuba gets the inhalers she desperately needs. They cost $120 each in the U.S., she needs two a month, she supports two kids, and she lives on Social Security Disability payments of $1,000 a month. After struggling for 20 years to afford the inhalers, she bursts into tears upon learning that they only cost 5 cents each in Cuba.

We could talk forever about the state of the U.S. health care system, and why these inhalers cost 2,400 times as much here as in Cuba. But let's save that for another time. This woman's situation demonstrates something besides the need for U.S. health care reform, and that's the need for people to make their personal savings a priority.

When most people retire, they think their financial situation will allow them to maintain their current standard of living. And they may be right—until they experience a major setback. If you live long enough, sooner or later something will happen to throw your financial projections way off course. There may be some expensive operation you need, or your property taxes may skyrocket, or you may be wrongfully sued, or you may greatly exceed your life expectancy.

I'm sure this woman didn't foresee developing severe respiratory problems after 9/11, and eventually needing 24% of her income to pay for her drugs. It's certainly not fair. But it's also not unusual to run out of money sooner than expected because things didn't work out as planned.

What can we do about this? We can't eliminate all the risk in our life, but we can do our best to be financially prepared for any misfortunes that may occur. I don't know what events led to this woman having no income other than Social Security Disability. Maybe her situation was avoidable, maybe not. But we should look at such tragedies as warnings of what can happen to any of us.

If you're young, start saving now. If you're not so young, start saving now. Invest in assets with good potential for appreciation over time, like stocks. If you don't know how to do this, spend some time educating yourself. When using a financial calculator that tells you how much you need to save, be conservative. Assume that you'll need more money than you think. It's OK if you end up with more than you need, but you don't ever want to have to decide between food, shelter, and drugs. Plan for the worst, and hope for the best.