From Peter Reagan at Birch Gold Group
Retirement security is an important concept. Unfortunately, corporate media spin and politicians who like to meddle with retirement plans muddy the definition and obscure exactly what it means.
For example, one of the more recent attempts by lawmakers to meddle with retirement was a piece of legislation known in the media as SECURE 2.0.
An equally-confusing, often-cited idea that there is some “magic number” you can aspire toward saving up, guaranteeing yourself a secure retirement.
Nonsense. Retirement security involves much more than that. In order to avoid writing an entire book on the subject, today I’ll address two crucial points. Both are perspectives everyone must evaluate for themselves before determining just how secure their retirement plans really are.
Let’s get started…
Forget “magic numbers” – here’s a better way to think about your retirement savings
Listen: I know I write a lot about the fallacy of the “magic number,” but just to be clear there’s nothing wrong with setting goals! Your goals can serve as milestones or guideposts, a way to keep yourself on track. Confirmation your plan is succeeding, or a warning when it is not.
So let’s update that arbitrary “magic number” we’re striving towards. Kiplinger’s Kyle Winkfield offers a more helpful perspective:
While some people think they need to reach a certain “number” in order to retire, it’s really about creating cash flow that you cannot outlive.
If you worked during the time when pensions were more common than they are today, that cash flow came from pension payments each month. Evaluate your pension payment, add in your Social Security benefits, make sure they’re less than your expenses – retirement planned!
Ah, the good old days…
Most of us simply don’t have a stable pension. What should we do? Winkfield recommends this approach:
Instead, today’s retirees should ask themselves how many years of uninterrupted, increasing income their assets can produce. The primary purpose of portfolios, real estate, retirement plans, financial products and strategies is to create that income.
Without reliable income that keeps up with inflation, you can’t have full security in retirement, especially when you consider increasing life spans. [emphasis added]
To summarize, the key to retirement security isn’t necessarily how much you save, but that the total of your income streams exceeds your expenses. (Obviously, there’s a strong correlation between amount saved and income streams.) Winkfield isn’t just talking about the hoary old saw about buying dividend stocks and living on the payments, or investing 100% of your savings in an annuity.
His point is, change your focus from the lump-sum magic number. Think instead about how much total income your retirement savings can generate through all means (profit-taking, dividends, bond coupons – the works). That’s where diversification can really make a difference. Proper diversification helps you make sure that, no matter what the market does, your overall savings will be safer than any single asset you own.
There’s a lot of nuance to diversification, so we’ll have to leave it at that.
The idea of retirement income, though, brings up another consideration. Most of us don’t have pensions, but we have the next-best thing – a government-guaranteed monthly payment coming to us when we retire.
It’s called Social Security.
Before you start including that into your retirement plans, though, there’s something you should know…
Social Security payroll taxes should come with this big warning
I’ve written about the state Social Security fund numerous times, including the fact that severe benefit cuts are on the way, and soon.
In somewhat mixed news, the Social Security funds have an extra year of solvency, though we’re also warned:
That is no reason to celebrate.
Hardly cheerful stuff (including the title: Social Security isn’t bankrupt). Well, why shouldn’t we be celebrating that extra year?
Alicia Munnell, director of the Center for Retirement Research at Boston College, explains it this way:
We’re getting into that area where immediate action will be required.
Ominous!
Munnell compares Social Security to an enormous cruise ship, and warns time is running out for Congress to take the necessary action to steer clear of the shoals and reefs we can see quite clearly.
The real challenge isn’t so much that Social Security is going to run out of money completely. It’s more that the promised benefit payments, well, they’re going to be revised dramatically in 2034.
By “revised dramatically,” we mean “a permanent 24.9 percent reduction” starting in 2035. (The alternative is to nearly triple the current payroll tax to 16.47%.)
What went wrong? Well, like Congress, Social Security started spending more than it took in. Starting in 2010, they started dipping into pre-retirement funds paid by working Americans to make good on their obligations to the already-retired. Like any entity that spends more than it makes, eventually, Social Security will run out of money.
Here’s the full 275-page report, if you really want to dig into the nuts and bolts.
The major take-away here?
A big warning that your hypothetical, future Social Security benefits won’t live up to your expectations. (They’ll either be about 1/4 less, or cost 3x as much.) That consideration should factor into your retirement income calculations.
Building a resilient retirement plan
Uncertainty has been a recurring theme for a while now. Uncertainty about how much you need to save, about Social Security’s future, whether 40-year-high inflation is “transitory” or here to stay, if we’re about to be in a recession (or already are).
And the markets – well, the markets are wildly uncertain right now.
The good news is, uncertainty doesn’t mean you’re out of options. One of the best ways to stay on track, and to stay sane, during the most uncertain times is to simply check in with your plan. Are you on track? Are you taking appropriate risks in line with your timeframe and personal situation? Vitally, are you properly diversified?
The best news is, this doesn’t have to be a major undertaking. (In case you don’t already have a roadmap, here’s a quick-start guide to retirement planning.) Learn more about building a crash-proof retirement plan here.
Take a few minutes right now to see how diversifying with physical gold and silver can help counter market volatility and add much-needed stability to your savings.
Ultimately, we’re each responsible for our own retirement security – and there’s no better time than right now to get started.
With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.
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2035? They are looking at a 10% COLA just this year.
BTW, the metals markets are so manipulated, they no longer serve as a hedge against inflation.
I couldn’t agree more Gold and to a lesser extent Silver is manipulated. The adage that Gold is a hedge against inflation doesn’t seem valid. If it is going to keep up with inflation, well when?? Overall inflation is probably around 25% Gold other than during the start of the Ukraine war isn’t going anywhere.
I still consider it an asset but I don’t buy the ‘hedge against inflation line’
GOLD IS NOT AN INVESTMENT; NOT AN INFLATION HEDGE
WHAT GOLD IS NOT
After reading recent articles by others and listening to what continues to pass as ‘fundamentals for gold’, I think it might be helpful to restate, and elaborate on, two specific things which gold is not…
1. Gold is not an investment.
2. Gold is not a hedge against inflation.
GOLD IS NOT AN INVESTMENT
According to Investopedia:
“An investment is an asset or item acquired with the goal of generating income or appreciation.”
Since gold is not a producing asset, i.e., no dividends or interest, the remaining objective can only be to acquire gold and hold it for appreciation purposes.
Appreciation is an increase in the value of an asset over time…
“When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth.” …Investopedia
The implication in the definitions and statements above is that as an asset increases in value over time, it creates wealth.
If gold is an investment, what is its value? Gold’s primary value is in its use as money. Gold is original money and the original measure of value for everything else.
To be considered an investment, gold’s value must have the potential to increase over time. Gold’s value, however, is constant and unchanging.
Below is a chart of gold prices for the past century. The prices are adjusted for the effects of inflation…
Since the price of gold peaked in 1980, there has been NO INCREASE in the value of gold; and a lot of volatility on the downside. The volatility in gold’s price has everything to do with the US dollar – and nothing else.
If you owned one ounce of gold in 1980 at $650 oz. and owned it in 2011 at $1895 oz., and again in 2020 at $2060 oz., there has been no increase in value.
Sure, the price went up; but the increase in price reflects only the loss in purchasing power of the US dollar (the effects of inflation) and not any increases in gold’s value. Also, there is no reason to expect anything different in the future.
As such, gold is not an investment; nor has it ever been. (see Gold Not An Investment; You Won’t Get Rich)
GOLD IS NOT AN INFLATION HEDGE
Some people promote gold as a hedge against inflation. They are wrong on two counts.
First, they are incorrect in what they mean when they refer to inflation and second, gold is not a hedge against inflation.
Inflation is the debasement of money by government and central banks. The inflation is created by continually expanding the supply of money and credit. The expansion of the supply of money and credit cheapens the value of all the money in circulation, leading to a loss in purchasing power of the currency – the US dollar.
What most people usually mean when they say ‘inflation’ is an increase in prices.
A general increase in prices for most goods and services over time is the result of the loss in purchasing power of the US dollar. The dollar’s loss in purchasing power is an effect of inflation. The inflation, however, has already happened.
Inflation is an intentional creation of government and central banks. The Federal Reserve is always creating new money. Our banking system functions on a fractional-reserve basis. (see Fractional-Reserve Banking Is The Elephant In The Room)
Moreover, the effects of inflation are volatile and unpredictable. What happened in the 1970s was different from what happened after Federal Reserve actions in 2008 and again last year. And the intended effects of Fed inflation are losing impetus. (see Fed Inflation Is Losing Its Intended Effect)
Complicating matters is the tendency to refer to economic effects associated with supply demand issues as ‘inflation’ due to their impact on prices:
“The current share of rising prices resulting from changes in economic demand, such as supply chain bottlenecks, pent-up demand, etc. have nothing to do with inflation or its effects and are a totally separate factor in price changes for various goods and services.” (see It’s Not Biden’s Inflation)
There is no hedge against government action to create and destroy its own money; but gold, when used properly, can act as a restraint on governments tendency to do so.
WHAT GOLD IS
Gold is real money. It is original money. It is the measure of value for everything else. Its value comes from its use as money and that value is constant and unchanging.
Gold’s higher price in dollars, over time, is an inverse reflection of the decline in purchasing power of the US dollar.
Substantial price increases in gold of lasting duration come after the fact; not before.
We will need to see renewed, lasting, significant weakness in the US dollar, manifest in the form of much higher prices for everything we buy and sell, IF the gold price is going to move above $2000 oz.
If that does happen, gold can help you preserve your wealth. Any increase in gold’s price would help offset the higher cost of living.
That is all you should reasonably expect from gold. To expect more than that is fantasy and delusion.
https://www.gold-eagle.com/article/gold-not-investment-not-inflation-hedge
GOLD PRICES – 100 YEAR HISTORICAL CHART
Interactive chart of historical data for real (inflation-adjusted) gold prices per ounce back to 1915. The series is deflated using the headline Consumer Price Index (CPI) with the most recent month as the base. The current month is updated on an hourly basis with today’s latest value. The current price of gold as of July 19, 2022 is $1,710.77 per ounce.
https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
• Gold is the money of Kings.
Silver is the money of Gentleman.
Barter is the money of Peasants.
Debt is the money of Slaves.
Norm Franz, Money & Wealth in the New Millennium: A Prophetic Guide to the New World Economic Order.
• “Paper money eventually returns to its intrinsic value — zero.”
Voltaire (1694-1778)
• Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: ‘Account overdrawn’.”
~~Francisco d’Anconia from “Atlas Shrugged” by Ayn Rand
• At the moment gold is the arch enemy of the fiat-regime. And people at large have short memories. 3 to 4 generations and they repeat the same behavior. The great depression is now so old, it is about to be repeated. Gold is obviously the only real portable wealth that will become glaringly obvious in the coming time.
• What would you prefer digital numbers controlled by the Banksters such as this: 01010100 01101000 01100101 01110011 01100101 00100000 01100001 01110010 01100101 00100000 01100001 01110011 00100000 01110111 01101111 01110010 01110100 01101000 01101100 01100101 01110011 01110011 00100000 01100001 01110011 00100000 01110000 01100001 01110000 01100101 01110010 00101110………………………………………..Or Gold and Silver IN YOUR HANDS?
• Great scheme. Create paper and tell people it’s backed by gold. Dump the paper to lower than price of gold and buy up the gold.
• Gold is beautiful to look at. Gold is real money created by God. Gold has a 5000 year history as a store of value. No wonder central banks and the wealthy are buying it.
• Look up all other nation’s paper currencies prices in terms of gold. It is easy to find, if you wish to see those charts. What you will see they look like a hockey stick. The US Federal Reserve note does not show that, yet. The reason: our currency is the World’s Reserve Currency, for now. The day that changes our currency will look like a hockey stick, as well. This event will happen in-a-blink-of-the-eye, as in over-night. It will happen, and you will not be LOL.
• Zero counterparty risk with gold.
• Don’t think of gold going up. It’s fiat going down with the collapse of the Ponzi.
• Over the long term, gold’s value is remarkably stable. Its price in fiat can rise without limit.
• Gold is not a commodity per say. Gold has always had the same value. When gold was 35 oz., it would by a large steer, or a nice Italian suit. Today gold still buys the same steer or Italian suit. It’s not the gold that has increased in value, but amount of devalued dollars to purchase it.
• “I buy gold because gold is the only form of money that is not simultaneously someone else’s liability.”
• That is the most sincere and solid reason of them all. It’s not a form of money, it’s the only true money.
• Everything we hope to witness in the way of gravitational leveling of fiat-currency “money” will be a very gradual process. Only some cataclysmic event would cause drastic fluctuations one way or the other. It took generations to build the pseudo “trust” in our unbacked-by-material-commodity-world-currency-fiat-paper system. Its disintegration will also be gradual.
However, I do believe that a point of understanding will be gleaned by a critical mass of the plebs and THEN – the exodus from dollars into gold and silver will become an unstoppable flood.
No one knows how this will all play out. But, it’s a pretty sure bet that it will be both chaotic and violent. People will clamor for safety toward some form of fungible exchange vehicle. Paper currency will no longer hold the “trust” of these countless minions… and only barter and REAL money GOLD & SILVER will suffice to facilitate trade.
Donkey is still holding.
I am making $162/hour telecommuting. I never imagined that it was honest to goodness yet my closest companion is earning $21 thousand a month cdc11 by working on the web, that was dcd truly shocking for me, she prescribed me to attempt it simply ,
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Way to go…Donkey has Silver Balls!
Store of value is a store of value. It only works over long periods of time.
I took less words.
” Now who can argue with that? I think we’re all indebted to mark (Gabby Johnson) for clearly stating what needed to be said. I’m particulary glad that these lovely children were here today to hear that speech. Not only was it authentic frontier gibberish, it expressed a courage little seen in this day and age.”
Gold is a speculation. It is an asset, but one does not invest in gold, one speculates. It has limited value in the real world, unlike silver. Gold is for jewellery and for hoarding.
Silver is the true speculation play. In 2 yrs 2009-2011 silver goes from $9 and change to almost $50. And 2 yrs later back down to $20 or so. Gold is the dog and silver is the tail.
They are nice insurance policies. Silver is the industrial metal of the two but its industrial use does not drive the price of silver.
I would prefer silver. Just me.
When you look at historical gold/silver ratios, currently ratio is very high. That makes silver a bargain. And you should have some in your preps for anti-microbial purposes or werewolves.
Never know when one might need to melt a silver bullet for those zombie type werewolves. I hear they work well on vultures too.
So far, four morons don’t know what speculation means, and don’t know what use gold has in the real world. Good to know stupid still shows up around here.
Go back to the Outback and learn about some basics about G and S.
And insurance against disaster. If Judas would sell Christ out for 30 pieces of silver, you just know that border guard will look the other way once that shiny gold coin is in his pocket. And I didn’t downvote you because it’s no skin off my ass if you’re wrong.
The gold price is pegged as a paper derivative that is NOT backed by an actual asset.
Treasury claims the US💲 is “backed by good faith in the US Government.”
💩 Looks like I better keep stacking.
So the last big COLA wave to hide the last fleecing behind it. Double digit COLA for a couple years so people feel like they are shrinking away their mortgage, but not realizing inflation was really 15+%, so they didn’t come out ahead.
Pay the rent, goyim.
Don’t have a mortgage in “retirement” whatever one does. And don’t rent. I.E. , all those working years should equate to a “rent free” abode other than paying the property tax man. It may be in Terlingua but pay no one for a house in “retirement”.
I do not believe for one minute that Social Security checks will be stopped. There may be no funds available but that has never stopped the government from spending.
$5000 a month check with bread at $200 a loaf.
Buy my book – Got Gold??
Sign up for our free email campaign of Got Gold?? Get our info on Got Gold/Silver. We’ll keep pumping this into your email box until you start buy’n our gold. Act today and save big…
Alder Gold Group…
yawn… I get it… brings in traffic and possibly a bit of revenue…
I’m with you Brian!
With:
1. The historical ratio of 15 ounces of Silver being worth one ounce of Gold…and today it being artificially rigged and manipulated (like every other market) to 90 ounces of Silver being worth 1 ounce of Gold. (It will stay rigged until its not).
2. Silver being historical money and desperately needed for a host of ever increasing technology needs and production.
3. Silver being mostly mined as a byproduct and mining slowing down.
4. Silver being at about 40% of two of its recent highs since the early 80’s. Gold much closer to its.
5. The greatest economic crash in history right around the corner.
6. Gold only really being best for a portion of WEALTH (that portion being an individual consideration) for people that actually have wealth…and that not being the majority of Americans.
7. The largest private owner of Silver in the world being Bankster JP Morgan
I would say to most: GOT SILVER?
(As a preemptive strike…Yes…I know you can’t eat Gold or Silver…I have food to do that with…just saying).
Sit on silver and I ain’t talking The Lone Ranger’s horse. Junk silver coin is cooler than hell to look at anyway. As kids we bought stuff with pre ’65 coins. Never thought about hording them but I did have an aunt that had stashed some 10,000 silver dollars. Someone broke in her home and stole the silver dollars and guns etc.
Got a backup plan when the Dow hits 27500?
Chickens.
The secret to retirement planning.
DEATH to the retirement killers!
Our chickens killed a RAT the other night. They’re tougher than their reputation says they are.
Give a man an egg, and he eats for a day.
Give a man a chicken, and there goes about two hours of his day.
“Build a man a fire, and he’ll be warm for a day. Set a man on fire, and he’ll be warm for the rest of his life.”
social security to de drastically cut wHen…….the Covid vaccines real purpose kicks in.
Proud to say I’ll die before I ever have to depend on the government teat!
“The best way to own gold is to discover it.”
– WC Fields
“You can pick your friends and you can pick your nose. But , you can’t pick your friend’s nose.”
-WC Fields
“Go away, kid. You bother me.”
“I never drink water. Fish do nasty things in it.”
WC was a character.
650 billion for Ukraine , and 10 million a day for Israel while Social Security goes broke. Priorities are priorities.
As usual…
Another bullshit article from people who tell you your dollars are going to be worthless, but they will gladly take them in trade for gold. You have to wonder why they don’t want to keep their gold to themselves seeing as the cash they get for selling it is going to be worthless? I guess they are just great humanitarians.