I tried to make sense out of it...the Class Act. No one spoke about it over the past six months...and somewhere in the health care bill signed...it's sitting there. No one in the media has spoken up much about it and I suspect that people are waking up today and discovering this thing for the first time.
The Class Act is really known as the Community Living Assistance Services and Support Act. Course, you would be scratching your head and wondering what that means. It's basically the government's long-term care program....which will be voluntary (at least until someone says otherwise).
In the old days...up until the day that the healthcare bill was passed...Medicare had a major deal in taking care of your long-term care requirements...meaning when you got bad enough and had to go to the old folks home. With the Class Act in full force....and vast money cut from Medicare....you now began to understand how the puzzle fits.
So how much? Well....somewhere between $150 to $250 a month, roughly. It'll all depend on your age and salary. This will all add up to $109 billion a year within ten years....if everyone played along.
The neat thing (the only neat thing)...is that it doesn't start this year. The feds will come up and notify your boss and company...about the upcoming deduction.
You have a five-year vesting period....meaning that you won't be able to even claim the money until you've got at least five years of contributions. So you can already imagine this massive pot of money sitting there from 2011 on...until around 2016 when you could take money out. The amount you are limited to? $75 a day.
I sat and looked at this....thinking that it's voluntary right now but it wouldn't take that much to push it up one notch. How many guys will sign up? If you are 21...zero. I will readily predict that it won't be of interest to anyone except guys over the age of 45. How many folks want to put $150 a month into something like this? Well...if you started at eighteen....putting $250 a month into an investment fund...you'd have $400k easily by age sixty. If you were going to do something of a drastic nature...I'd go for the investment fund and forget this.