From Birch Gold Group
It used to be that you could save money for retirement, put some of it into Treasuries and/or CDs, and your “nest-egg” would be primed to give you retirement security.
That clear retirement path ended in 2000, according to John Mauldin in a recent SeekingAlpha article (emphasis ours):
Until 2000 or so, it was a simple matter to put all your savings in CDs, Treasury bonds, or tax-free muni bonds and generate a steady income. Better yet, you could do this with no risk, just by keeping your money in FDIC-insured banks. This is not possible today due to low rates.
Of course, saving money for retirement is not an easy task. But before 2000, the leverage you could gain from the “simple” plan Mauldin identified was greater. That leverage came from better interest rates that CDs and Treasuries provided.
For example, if you managed to save one million dollars for retirement before 2000, that provided an adequate annual income from CD, pension, and Treasury distributions for most retirees. Add a check from the once-trusted Social Security system, and the idea of having a “safe retirement” was attainable.
But this is 2019. According to Mauldin, the outlook now is pretty dire:
Neither you nor a massive pension plan acting on your behalf can generate enough risk-free income to assure you a comfortable retirement.
He alludes to some of the same points we’ve shined a light on over the last year and a half to explain why, such as the Government’s plan to drop rates and print money, all while hoping to raise rates and drive real economic growth without risking retirees’ futures.
That plan doesn’t appear to be working so well, and may actually be leading pensions down a road to nowhere.
Pensions May Be Heading Into a “Black Hole”
In August of 2018, a paper from the Wharton School explained the dire situation for public pensions, one which they may never escape from:
Moody’s Investors Service recently estimated that public pensions are underfunded by $4.4 trillion. That amount, which is equivalent to the economy of Germany, accounts for one-fifth of national debt. It’s a significant concern for public employees who were banking on a fully funded retirement to get them through their golden years.
The Wharton paper continued by explaining the Government’s role in driving public pensions closer towards a “black hole” that it can’t avoid:
Government administrators believed their investment returns would be bigger, and they believed retired employees would die sooner. They used overly optimistic actuarial assumptions, and they thought the long-term nature of the investments could handle higher risk.
Currently, we have states choosing between repairing severely worn infrastructure and paying pension distributions. Washington appears to be throwing their hands up when facing this decision, choosing instead to create ridiculous taxes as a result of desperation.
Most state’s pension programs are in a poor state of health according to the most recent official reports available (see map below):
Corporate pensions are suffering a $240 billion shortfall of their own. These programs were “fully funded” in 2007, and have yet to recover.
With the worldwide pension crisis approaching $400 trillion, it doesn’t look like there is any good way out of this maze of pension destruction. Politicians like to point to tired solutions like increased contributions or higher taxes.
It’s obvious we need better ideas, and part of your solution will likely require retirement “self-reliance.”
Preserve Your Best Chance for a Secure Retirement
Growing benefit cuts and funding gaps mean your own pension plan won’t be “guaranteed” stable any longer. Politicians can only come up with tax increases, new taxes, and a slew of seemingly desperate solutions. That won’t help your retirement.
It’s critical to start making your portfolio as resilient as possible so you can enjoy as safe a retirement as possible.
Creating a savings plan and diversifying your assets are good places to start. Having assets such as precious metals in your portfolio can add much-need security to your retirement plan. Making moves now, before an emergency, is a smart way to protect your hard-earned savings.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
I saw on Realtor.com that there’s a nice mobile home in Santa Cruz, CA for only $150,000 right on the ocean like Jim Rockford. Except a fancy mobile home – way fancier than Rockford’s. Hell I’d live in THAT mobile home – even if Angel Martinez dropped by once in a while and put my life at risk. Then I saw that the lot rent is $4,500 / month. I’d need a shit ton of gold.
With a gold IRA, you will be paying annual vault and maintenance fees.
I have no idea what kind of maintenance stacks of gold/silver need, but they charge it.
You will also pay a fee for withdrawing YOUR metals.
I have a monster box of silver buried under some pavers in the back yard, been there since 2011, and NO vaults fees. Just a bitch keeping the grass from growing between the pavers, and guess what?
NO FEES!
How about a socialist bailout for all pension plans including social security . Hey it was good for Wall Street , it was good for the auto and mortgage banking industry with bonuses paid for failure so come on America see how well socialism worked for Goldman Sachs and that ilk surely it will work for the rest of us unwashed . Now where can we find deep pockets to plunder for all this ????
The working class retirement plans were sacrificed on the alter of the banks by the FED starting in the early 2000’s. They have no conscious about what has been done, but one day they will have to account for all of what they have done. I mean how much money is enough when you have millions and millions?
OMG. This article ending up just being a sales plug
to buy Gold I.R.A.s. Yeah, let someone else hold your
little wealth and you could easily end up holding the bag.
Nothing in it, of course.
Semi-precious metals is a good bet. Steel, brass, copper,
lead. You know, things that go into a breech and some it
down the barrel. There was once a big government boy in
China who said that happiness is a warm gun. Might be
onto something.
Once heard it said about guns: Smoking is bad for their health.
The killer regarding a “Gold IRA” is that it converts a non-reportable asset, with potential for capital gains (taxed or untaxed), into a fully reportable asset, with gains taxed as ordinary income. When you add in multiple years of storage fees, it’s just a very stupid thing to do.
The Gold IRA option was created only because most Americans have very in little long-term savings that are outside of qualified retirement plans, and the gold merchants want a cut of that retirement stash.
Not planning on retirement is the best plan in fourth turning.
Off topic, all tied up @ 1 heading to St. Loo. Great OT push by Blues in gm. 2. Yeah, buddy.
It was awesome!
Fingers crossed as it would be amazing to see the Blues win!
Gold, like $100 bills, is dead capital.
There may be occasions to hold capital wealth in a “dead” state like this, but they are rare and apparently not predictable with enough accuracy to know when to hold ’em and when to fold ’em.
I have GOLD investment newsletters from 1993. Anyone who followed their suggestions back then is still in a negative return, while the herd who invested in stocks is up massively.
You never really know what to do, because the future is always a surprise.
That said, this article is BS. Even at 2.4% yield, if you simply stop spending all your money, eventually you can accumulate enough for even a small yield to equal meaningful money each month.
I agree with a lot of what you just said and most importantly…in pre-retirement and while retired…..key is the amount of expenses. There is no amount great enough to cover unbridled spending.