The Retirement Crisis That Must Not Be Mentioned
Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan. As many Americans enter into retirement they are realizing one unfortunate thing. The new retirement plan is no retirement at all. – MyBudget360.com
Dominant Social Theme: Retirement is a Western right.
Free-Market Analysis: A theme that is little explored in the Western mainstream press is that retirement has all but collapsed for many in the middle classes.
We have in the past called this condition "dreamtime" – for it was built on central banking initiatives and fostered by central banking super-money printing. The idea was that the stock market was going to go up and up – and people would be able to take retirement based on their own investment initiatives.
In Europe, state-fostered retirement provided a slightly different model. But the main issue in both the US and Europe was that an entity larger than the individual was going to manage the realities of retirement.
The results have been far different than predicted, however. In the US, the collapse of the stock market drove millions out of various investments while low interest rates have made fixed income holdings virtually worthless from an income standpoint.
In Europe, "austerity" has blighted the hopes of tens of millions who put their faith in government benefits that probably never will be delivered as promised. Here's more from the article as regards the US situation:
Over the last few decades Americans were promised the idea of a comfortable retirement yet none of this has materialized because of financial swindling and a real estate bubble that will go down in the record books. On the flip side, many Americans went into massive debt and consumed their future nest egg today with big purchases outside of their budgets.
So what are we left with today? We are left with over 75,000,000 baby boomers entering into retirement with very little saved. One out of three Americans has absolutely no money saved to their name. In 1983 over 60 percent of working Americans had some sort of defined-benefit pension plan. Today that number is below 20 percent. With the average worker making $25,000 a year the media designed idea of retirement is largely just another fantasy.
Many large pension funds had models built on absurdly optimistic stock and bond market returns. These accounts did well in an era where the stock market roared ferociously because of the prime position the U.S. had after World War II. Those pension accounts are becoming a relic of the past …
The bottom line when it comes to retirement is that the old methods probably worked better than the new ones. The old method of retirement – only a century or so away – involved generations of families living together and taking care of each other within the context of a shared homestead.
But that family has been atomized and its earning power severely affected by injurious monetary and fiscal policies. Price inflation, low rates and high taxes make it very difficult for the average family to save. Additionally, as people have moved away from trades and farming, the jobs they work have become increasingly tenuous and based on business cycle booms and busts.
It is central bank-sponsored monetary inflation and the downturns it causes that affect employment as much as low interest rates and market volatility affect savings. People are often afraid to create a savings or investment plan because they have no idea of the sustainability of employment.
There are better ways to organize Western economies, but they start with the idea that money itself cannot be managed and that the price and value of money should not be left up to the decisions of a few men. More than that, people must begin to realize that those who make promises on behalf of the state are probably not in a position to keep them.
In 1983 62 percent of working Americans had some sort of defined benefit plan. In 2004 it was down to 20 percent and today it is lower. Americans have been forced to play the stock market game through their 401ks. This has actually turned out worse for average Americans as they try to compete with high frequency swindlers and investment banking crooks. Clearly someone is making profits as investment bankers pull down million dollar bonuses all the while the stock market has gone into reverse over a decade.
This article makes a big deal about swindles and Wall Street crookedness, but the really big problem is money itself and how it is controlled by just a few on behalf of many.
The retirement people were "promised" is not going to materialize. A certain class of people demanded control of the economy in Europe and the US in return for creating a safe lifestyle and retirement for citizens. They received the control and have sustained it, but the citizens whom they served have received nothing in return.
When it comes to life-sustaining decisions, family matters and personal retirement, it is much wiser to trust yourself, your loved ones and your friends and local community than it is to put faith in any big-government program or solution.
Educate yourself about finance and the way the world really works. Try to live independently. Don't believe the promises made to you – for there is always an ulterior motive and those making them may not be around to keep them.
You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.
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