Is Your Retirement Planning as Bad as Most Americans' Planning? Find Out Here

mrearlygold

For those who do not have or wish to have a government regulated retirement fund, do you consider your precious metals part of your retirement planning?


Is Your Retirement Planning as Bad as Most Americans' Planning? Find Out Here
by Gary North
GaryNorth.com

The National Institute on Retirement Security has issued a report: The Retirement Savings Crisis: Is It Worse Than We Think? There is no question about it; it is worse than we think – way, way worse than we think. It is posted here.

The report is divided into two parts. The first part is clear. It is a careful description of the discrepancy between the retirement plans of Americans and the financial resources available to these Americans to fulfill their retirement plans. The discrepancy is greater than I had imagined. In contrast, the second part is an exercise in utter fantasy. It calls for massive federal programs to increase the amount of capital that private firms invest in employees' retirement programs. In other words, there is a massive discrepancy between the first part of the report and the second part.

Here are some of the highlights from the first part.

Approximately 38,000,000 working households in the United States do not own any retirement assets. This is about 45% of all the working households in the United States. They do not have an IRA. They do not have a 401(k). They do not have anything. In other words, they have made no plans whatsoever to fund their retirements.

If we take into consideration all households in America, meaning the ones that have no retirement savings and the ones that have some retirement savings, the median retirement account balance is $3,000. Got that? $3,000. Americans believe that $3,000 will carry them through retirement, as long as they continue to let those 3,000 precious dollars grow by wise investing. If we talk about people who are 55 years or older and still in the labor force, the total accumulated retirement savings for all of these people is $12,000 (p. 1). This means they have about 12 years, max, to accumuulate 8 to 11 times their annual income in the final year of their careers.

The utter impossibility of this situation should be obvious. This is not a slight shortfall. This is a guaranteed head-on collision inside the American social order. That is because the Social Security system is going bankrupt, which the second part of this report categorically denies. There is no possibility that the dreams and schemes of Americans will be fulfilled by the Social Security system.

Even if they could could be fulfilled, the Medicare system's shortfall will completely bankrupt the federal government anyway. Medicare is a huge expense, and this expense is going to be shifted onto the backs of the families of Americans. In other words, not only is Social Security going to go belly-up, the Medicare system is going to go belly-up. This means that the total burden of the Social Security tax system is going to be imposed on workers, but there is going to be a steady increase in the retirement age for these workers. They will pay into the system, and they are not going to get much out.

Meanwhile, the Medicare system, which has to start at age 65, because the private insurance companies kick everybody out of their programs at age 65, will bankrupt the federal government. There is no question about this. The system is over $220 trillion in the hole: Kotlikoff's 2012 estimate.

With this as background, consider further statistical indicators from the first part of this report. Factor these into your plans, and especially your plans for what happens in American political life, when the Medicare system will overwhelm the entire federal government, and the Social Security trust fund is empty today, not in 20 or 30 years.
CONTINUED

pf70collector

I think when the baby boomers start to die off in 20 years it may help. But corporate america has shifted its retirement obligations (pensions) of its employees to the government. That's why those CEO make 500 to 1 to the average worker. Corporate greed plays a huge factor.

DeepCoin

I believe that in a well balanced portfolio no more than 3 percent should be in precious metals. I tend towards numismatic materials in high grades. MS66 Saints have value beyond the metal component and that buffers the up and down nature of commodity markets, not to mention their manipulation.

drei3ree

OnlyGoldIsMoney

<< <i>I think when the baby boomers start to die off in 20 years it may help. But corporate america has shifted its retirement obligations (pensions) of its employees to the government. That's why those CEO make 500 to 1 to the average worker. Corporate greed plays a huge factor. >>




Class warfare anyone?

Blaming employers for the folly of their employees is a non starter.

The problems described in the article posted by mrearlygold center on the failure of many workers to save anything for retirement.

You can reduce CEO's down to minimum wage and it won't remedy the problem of people choosing not to save for retirement.

derryb

My families' tax free Roths have gained over 1000% over the last five years using leveraged silver ETFs USLV and DSLV. Paper and volatility can be your friend if you let them. They can be your enemy if you don't watch them closely. These Roths have been 100% metal for the past five years and can be cashed out at any time.

tneig

At age 59 I guess anything I have is part of my retirement portfolio now.

I know few who in middle years, without a pension plan to count on, that have enough to be covered properly, or even taking the proper steps.

What in the world are they going to do?, is what keeps me thinking about my plan.

Baley

<< <i>... corporate america has shifted its retirement obligations (pensions) of its employees to the government. That's why those CEO make 500 to 1 to the average worker... >>



There may be one or two other little reasons that CEOs and other business executives make more than average workers, these reasons may include education, experience, skills, and supply and demand for individuals with those attributes.

derryb

<< <i>

<< <i>... corporate america has shifted its retirement obligations (pensions) of its employees to the government. That's why those CEO make 500 to 1 to the average worker... >>



There may be one or two other little reasons that CEOs and other business executives make more than average workers, these reasons may include education, experience, skills, and supply and demand for individuals with those attributes. >>


The majority of them are overpaid for no other reason than to eventually be the fall guy. I can't think of one that is worth his pay. Regardless of education, experience, skills and supply and demand, there is not one good reason for any of them to make more than the average medical doctor or lawyer. Every one of them should be put on a profit sharing pay plan.

OPA

Although I do own physical PM's, they are and never have been part of my retirement portfolio. It's considered my "play money" to do with whatever I please and it's not part of my regular source of income.

vpr

When I was in college, I was making $600 a month for 9 months and $1200 a month for 3 months each year. That was to cover living expenses and other school related misc expenses. I was still able to save money. If I can do it, anyone can do it. It's as simple as saying no to things you don't need. Like fancy phones, electronic gadgets, brand name clothing etc.

The reason people don't save is because they think TV at $150 a month is a necessity, for example. They shouldn't be bailed out because they made the wrong choices when they were young. If anything, the government should lower taxes on savers and increase them on spenders. That's why mortgage interest deduction makes no sense whatsoever. There should be a deduction for savings, instead. Make the contribution limits on Roth IRA much higher while maintaining the income limits. And lower income tax rates significantly and add a VAT on most useless spending. If that happened, my taxes would go down significantly! I get almost no deductions in the current system because it doesn't reward responsible people.

Now if only I could opt out of social security and invest the money myself, I would be so much better off in retirement.

WildIdea

<< <i>When I was in college, I was making $600 a month for 9 months and $1200 a month for 3 months each year. That was to cover living expenses and other school related misc expenses. I was still able to save money. If I can do it, anyone can do it. It's as simple as saying no to things you don't need. Like fancy phones, electronic gadgets, brand name clothing etc.

The reason people don't save is because they think TV at $150 a month is a necessity, for example. They shouldn't be bailed out because they made the wrong choices when they were young. If anything, the government should lower taxes on savers and increase them on spenders. That's why mortgage interest deduction makes no sense whatsoever. There should be a deduction for savings, instead. Make the contribution limits on Roth IRA much higher while maintaining the income limits. And lower income tax rates significantly and add a VAT on most useless spending. If that happened, my taxes would go down significantly! I get almost no deductions in the current system because it doesn't reward responsible people.

Now if only I could opt out of social security and invest the money myself, I would be so much better off in retirement. >>



I like several ideas in this post, very realistic observations from a fellow getting tired running on the current treadmill. Conclusions of a working man. Thank you.

vpr

Thanks for the kind comment. To put this in perspective, I graudated from college in 2008. So, not too long ago. I was making about $9000 a year and I had to fit everything into that. Rent, food, books, fun spending and saving. I decided to rent a 2 bedroom apartment with 3 other people. I was living with all of my belongings in a small room that had just enough space for a queen sized bed. I took no vacations for 4 years. My fun spending was a 6 pack of miller lite and $3 that I pitched in for gas, so I could go cliff diving at a nearby river. I only shopped for clothes maybe once a year and I only owned 2 pairs of jeans at any given time. And those were purchased with coupons at Old Navy. Every other weekend or so, I'd hit up a Frat or a house party. Unlimited beer for $5 a person. Can't beat that!

WildIdea

<< <i>Thanks for the kind comment. To put this in perspective, I graudated from college in 2008. So, not too long ago. I was making about $9000 a year and I had to fit everything into that. Rent, food, books, fun spending and saving. I decided to rent a 2 bedroom apartment with 3 other people. I was living with all of my belongings in a small room that had just enough space for a queen sized bed. I took no vacations for 4 years. My fun spending was a 6 pack of miller lite and $3 that I pitched in for gas, so I could go cliff diving at a nearby river. I only shopped for clothes maybe once a year and I only owned 2 pairs of jeans at any given time. And those were purchased with coupons at Old Navy. Every other weekend or so, I'd hit up a Frat or a house party. Unlimited beer for $5 a person. Can't beat that! >>



Well for me I finished high school while living on my own from junior year. Went straight into work force in 1991 at a slaughter house cutting meat off bones for 4 years for 9 bucks an hour. Then concrete till I was 25. While looking at dead end jobs, I started my own business with 8 k investment and 5 in the bank in 2001 chasing my art career. Have stayed sober and dedicated the entire time and have had great success to date and money isn't an issue lets say. With tat said, I too have modest entertainment interests and would rather build wealth for my family and prepare for the inevitable events in life. I Didn't go to collage but have paid for my education none the less. Proud of work and what it brings don't appreciate lay abouts wanting a piece of it or acting like Im a chump for having a job. At 41 I'm just getting started I'd say. Could probably lose it all and build it again no prob with what I know now. Keep at it my friend and never let off the gas, you'll do just fine.