Guest Post by Martin Armstrong
Credit card balances in the US have surpassed $1 trillion for the first time, with balances up almost 20% from a year ago. The Federal Reserve Bank of New York reported that total credit card debt stood at $986 billion in the first quarter of 2023, unchanged from the record hit at the end of 2022. The average credit card interest rate offered in the US over the last three months of 2022 stood at 21.6%, according to WalletHub, a jump from about 18% a year prior. Americans are now tapping into their retirement funds to make ends meet.
Hardship withdrawals allow employees to pull money out of their 401K for an “immediate and heavy financial need.” No one would recommend doing this unless the situation was dire. Bank of America reported that 15,950 employees enrolled in 401K programs made a hardship withdrawal during the first three months of 2023, a 36% rise from Q2 22. Individuals must show evidence that the money will be used for a major hardship in order to avoid the 10% early withdrawal fee imposed for those under 59.5.
It costs more money to borrow thanks to rising interest rates. The majority of Americans do not have money stashed away for a rainy day, and those who do are rapidly draining their accounts to keep up with Biden’s economy. The CPI report in June showed a rise of 3% YoY, but look around, absolutely everything is more expensive. Shelter costs have reached an all-time high and the price of food is on the rise, especially with wheat price manipulation going on using the war in Russia as a guise. Why are we sending hundreds of billions to a foreign nation when our own people cannot afford to live? The masses need to wakeup and get mad at their current predicament before the next election if we even have one.
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.)
401k’s are a fucking scam. They always were.
Anything to prevent you from access to your own money. And where the fuck does private industry get off telling you you HAVE to make an investment in ANY FUCKING THING?
I’m starting to get WHY people here despair of the public ever waking up and growing balls. And when the food runs out, they’ll kill each other instead of taking out the rat fucking Government responsible for their suffering.
America, YOU DESERVE THIS!!!
You are probably correct.
Nothing is perfect. But millions have retired using their 401 K as the backbone of their retirement. It sure beats Social Insecurity. See Jdog’s post below. He explains it very well.
The nice Hmong girl at the farmers’ market gave me $3 of peppers for only $2. Also, my tomatoes are coming in, which will save me ten of dollars. I think we can make it.
Lol! May as well spend it now before it loses all of it’s value.
Most are probably trying not to go broke.
I watch people fall into these traps and I always think, boy are they dumb.
Thats about all I have to say about 401K’s.
Paid my house off in my 40’s, never played the 401K, bought hard assets……I sleep good at night. Maintaining debt in lieu of putting money in 401k is dumb.
DV that too, I’m the moron who sleeps well.
October looks to be really ugly this year. Student loans averaging $300/mo per borrower come out of the debt fueled economy. Congress will play the shut down game again. And, as this article mentions, credit cards are already maxed.
Keep your powder dry and October may be a good time to buy on the cheap. As ugly as things get remember that it doesn’t come apart until EBT is late. Then it is Game On!
Buy what on the cheap? Things don’t drop in price that fast.
Lahaina, Maui
Hmm, me thinks Lahaina, Maui will NEVER be cheap.
Maui Wowie
Buy what is right. Most everything consumers want and need is imported. A dead dollar won’t be getting letters of credit for imports. Even most of our foods are imported. They’ve already prepped us for a Chinese industrial collapse too.
If I’m able to buy good rural real estate for 40 cents on the dollar because someone is dumping their extras to afford the mortgage on their primary residence I think that is a good buy cheap. It’s happened enough times before to make me realize these things aren’t coincidence.
Same people destroying cities for cheap real estate and to harvest tax funds spent on “rebuilding the inner harbor” or such nonsense. The Sopranos even did an entire storyline on that scam. Hell, Kensington has been rebuilding since Admin was a kid.
GNL, only non essentials may drop to “cheap”—not anything I would need. I was in Sams last week; there were yellow tags on more than half the inventory. Cash back, rollbacks, clearance items. I still bought nothing. Same at Walmart. They are well connected; do they have the inside info to help them survive the coming crush? I’m thinking inventory reduction , squeezing out competition before the next thing. Essentials will ONLY go up.
They will use student loan debt as a bargaining chip to pollute yourself and die. There isn’t a chance in hell that most people can make the student loan payments. The dollar very possibly may take a death dive after August 22 BRICS meeting. Wonder what they have planned for September 11? The numbers 22 and 11 are special numbers for the serpents of the dust. They’ve made everyone think it’s about the money or follow the money when, in fact, it’s you or us they’ve brainwashed to believe money is the endgame. The endgame is their agenda and its goal and that goal does not include a population. Perhaps a following of a few pets but the mingled masses will be history: the goal.
Remember all the so called alt, or right wing, Econ writers were also saying what a good deal they were- keep your own money with strings attached. In addition it was a way to get regular people invested in the stock market (for obvious and not so obvious reasons). The same ones that say a million dollars isn’t enough in your retirement portfolio- also that you need a portfolio.
They are all complete failures for people looking for money advice but love the game and most are so programmed (through education mostly- worse than medical Ed) that they cannot think realistically and outofthebox. They love their theory of the day.
I understand how someone can dig deep into a subject but, first of all, money has a danger in itself and the theories do not necessarily correspond to individual reality.
Take the deficit. It is supposedly so unrealistic it doesn’t really exist. Think about it. Also I hear we are responsible and have to ‘pay it back’ etc. Why?
Why not run up your credit cards if you have to, then stiff them? There are moral reasons but not really economic. CC companies change their terms all of the time, but you can’t so is that a real contract? To have a contract that says they can change it but you can’t?
For instance these ‘experts’ could have been encouraging real solutions instead of ‘invest differently, smarter or harder.
401K’s are a great wealth accumulation vehicle providing a person is capable of doing math. Most people in the US unfortunately now are not….
The fact that they are tax deferred, means you are basically buying $10 bills for $6 or $7 dollars. I will take that deal all day long. The fact that they are able to grow tax deferred means your compounding is boosted by 30-40% . The fact that most employers match your contribution up to 6% is a cherry on top. Anyone with a little self discipline and the common sense to make reasonable investments with their 401K will easily walk away with a million dollar account after 40 years of contributions. If you didn’t then you missed the opportunity to do so and you deserve to be poor…. Most idiots I used to work with only contributed 6%, and they are still working……and hating it….
And the best part is you have no idea how high the deferred tax is going to be, when you take it out!
And how bad inflation might be when the taxman knocketh.
Then there is the looming threat of BANKSTER BAIL INs.
After the above 401k was cashed in 99 (the timing was perfect) and most of its profit put into PMs we used the vehicle in two other jobs and recently cashed in the last of it as we are 73 & 68.
It is not just our fourth quarter ages…but I feel the road has ended and the can is now a block of cement.
Timing is everything no matter the investment or asset, many ways to skin the cat and stay out of the debt/tax traps.
You chose wisely, Mark.
BL,
Heading to the Credit Union tomorrow to put in some of the last 401k digits in with them…but taking a chunk home for more Prep and enhance my cash stash.
I am always out early and back in late…but looking around at this shit show…we have to be at or coming to the crescendo???
Bill Holter is convinced Mad Max is just around the corner…gonna buy more ‘stuff’ for Mad mark!
Great story. I still have some of my $5 an ounce silver and $300 an ounce gold.
AKJOHN,
I also went in steady in PMs from 2013 to 2018. Always been a Macro guy with PMs.
We built our dream home in 2020. In 2018 Gold was driven down to about $1,250 an ounce. I took my only Micro gamble (been in Silver since 83 Gold since 99) and put 65k of the ‘Dream House digits into gold…took a few days to convince my wife…as we were building this house with no mortgage and it was tight.
Mortgage is a Latin word meaning Death Grip – didn’t need a death grip on us in our fourth quarter.
Just as we started to build sold that Micro gold gamble for over $1,900 an ounce.
Ti…tim…timi…timin…timing is everything!
I do have a silver store on ebay. I buy and sell when the price is right. I have mostly Australian silver. Lunar is my best seller, but I also sell Kooks, Koalas, and a few other things.
I have watched a lot of old people grow poor as they grow old, and the thing that made them poor was not paying taxes, it was that they did not save enough to begin with, and as a result inflation ate up their savings.
People who do not contribute enough to their own retirement usually divert the money to buy what they want and cannot afford earlier in life…. Growing old sucks enough, without being impoverished and having to eat cat food……
Look , when you retire, you will be on social security and if you are lucky that will be $2000 a month. You do the math Einstein….. Then factor in you will have at least 7 years before RMD’s kick in, so most of you will be able to draw down your 401K quite a bit before RMD’s kick in at minimum tax rates. Your problem will not be paying the taxes, it will be do you have a big enough balance to offset inflation in your old age…..
I’ve never had 401 even offered.
I regularly do work for a friend/neighbor who is an engineer for the power co. He buys and sells cars, trucks,trailers and especially antique and classics! The latter is my specialty, my library goes back to the 1920’s. He is never in a hurry, or bitching on parts OR labor prices, ideal customer!
My comment is only this; he tells me that even if he pays interest to borrow against his 401. HE is paying himself the interest! Not your run of the mill maff challenged Merican idiot!
Peace, L.
You forgot about the 10% penalty you pay to the government, and the loss of earnings of that money until it is repaid. Borrowing from your 401/IRA is an act of desperation, or what they used to call a scared money decision. Not a smart thing to do ever….
We maxed out my Wife’s every year, and she had more in hers after 14 years than people who for forty. It’s just one of the reasons I retired at 55 at her at 52.
I showed my son $100/wk invested from 1999 until a few weeks ago was ~$400k with a calculator…in a Roth tax-free at withdraw. In 2007 you lost 37% but for the next decade after that made $ hand over fist.
Thats great! What people really do not understand is the value of retiring early. After 65, you really do not feel very good and do not enjoy life very much. It is before 65 that you enjoy life the most. The truth is it sucks to be old, and the only thing worse than being old, is being old and poor….
If you can afford it start a family 401K.
Here’s how it works. You offer your adult kid a “match” for his 401K contributions. You could match any amount up to the tax limit for gifts $17k.
You could match any where from let’s say 10 to 75%.
The benefits are your adult child has more incentive to work, invest for retirement, and if you have grandchildren they won’t have to support their parents (your children) when they get too old to work.