Thursday, December 5, 2019

Retirement Crisis Looming -- IRA, 401K, Pensions, Social Security, Demographic Time Bomb !!








Social Security is 14 years short of insolvency; pensions are largely underfunded and in sharp decline, and personal savings are at historic lows. We predict a national crisis in public sector pensions within the next decade that will leave state and local governments bankrupt and taxpayers on the hook for trillions of dollars. The pension crisis is the most significant single theme of our generation. Welcome to The Atlantis Report. Social Security is expected to be insolvent in 2033. In 1950, there were 16.5 workers for every Social Security beneficiary. Today, there are less than three workers paying in for each recipient. Company-sponsored pensions have been in rapid decrease since the 1980s. Today, less than one out of every five private-sector employees has a pension. As a group, American workers are evaluated to be $6.6 TRILLION short of what they need to retire comfortably. 10,000 Baby boomers are reaching “retirement age” every day. Forty percent of Baby boomers anticipate to work “until they drop.” Demographics are the biggest story of our time. And it's all about the story of the baby boomer generation. This was the largest generation of people the world had ever known in the wealthiest countries and across the globe. Now, that generation drove all of the macroeconomic forces that we come to recognize as usual. When they first came into the labor force back in the 1970s when they 20 or so years old, what they did was they bid up the demand for goods. Because if you think about it, a record number of people came in to buy their first suits, their first house, their first car, their first table, their first chair. Everything was new. That demand created a tremendous problem for the world to address, and it created the inflationary environment of the '80s. Yes, there were monetary grounds behind that, as well. But really, a lot of it was driven by demographics. Now, as that generation moved through their lifetimes, they had a particular set of behavior patterns that impacted the financial world first and foremost. The main one is the fact that after the Second World War, that young generation decided they didn't want to be their parents, as nearly everybody does. And they said, we don't want to be austere. Their parents had lived through two world wars. What they wanted to do was spend. They wanted to be free of the shackles of the things that their parents had had in the past. So what happened was Wall Street, being smart as ever, came up with this genius idea. It was the pension plan. Now, pension plans had existed for a long time before. But really, this is where the pension plan became everything. Wall Street fed them a story. The story was simple. You don't need to save as much money as your parents. You don't need to spend or save 20% of your income. What you need to do is give it to us. We're the smart guys, and we'll turn into more money. And that means you'll have more money to spend. So that started the most significant stock market boom in all of recorded history. Now, the other thing that happened is as consumption became a more substantial part of the economy-- and that was driven by government policy as well-- as the baby boomers were offered another piece of magic from Wall Street. They were provided credit. So in the '80s, Ronald Reagan and Margaret Thatcher basically allowed credit to be available to everybody. So suddenly, the credit boom took off. So there we have two monetary booms happening at the same time. The baby boomers have stopped saving, have given a little bit of money from their 401(k)s to Wall Street that starts accumulating quickly. Their income has also then gone into credit, the servicing of credit to buy more and more goods. That trend continued for a long time. The trend of consumption within the US economy continues to this day. It's massively outsized because of this credit boom. That meant that Wall Street became outsized too. It was taking the money from the pension system, and investing that-- or speculating with it-- and also making money from the credit side. Now, that all ended in a complete blow-up that happened in 2008. But why did 2000 happen? Well, interestingly enough, that's when the first baby boomers started retiring. When they began retiring, suddenly there were some sellers of stocks. Before that, everybody had been buying stocks every single month in their 401(k). Buying-the-dip mentality became the key thing for the world. But the problem is now we're facing the demographic time bomb. You see, the returns in financial markets weren't quite as good as the snake oil salesman on Wall Street told everybody. And that was a problem. It's kind of like a Ponzi scheme. The first people to get out made all the returns. The last people to get out get nothing. And that's the real issue. The real question is all of this is coming to a head because everybody is about to retire. Currently, we're retiring at about 3.9 million in America alone, baby boomers. And it goes up in a straight line all the way through to 2027. What we've got is more and more people, every year, retiring. That is an extraordinary state of affairs, because retirees have a different behavior pattern than the average person. The average retirement age is currently around 64 in America. And this year, the average baby boomer is 64. It's telling us the average person is destined to retire this year. But the real question is here is who can afford to retire. You see, if we look at the retirement age of Americans, the actual retirement age is going up. And those who haven't retired, they're deciding that they're going to have to work longer too. You see, the real issue here is that people can't afford to retire. So they have to extend retirement-- either expected or current retirement dates-- out into the future. It's this problem of not being able to afford retirement that is creating the problems we've got today. The other way you can look at this is when we look at the labor force participation rate of the people above 65 years old. Oddly, the 65-year-olds have been coming back into the labor force at a record rate. They're competing for jobs with millennials and others. This is an odd state of affairs. And, again, it is driven by the issue of these baby boomers having far too much debt to retire and not enough savings. The US average pension benefits are $23,000 a year. But there's a bit of an issue because disposable income per capita is $44,000 a year. Now, the ideal retirement income that these people want obviously matches their disposable income, which is about $44,000 to $45,000 a year. But really, when you impute from their savings, what they really get is another $9,000. So their total benefits are about $31,000 versus their needs of about $45,000. This is a huge problem. There's a 30% shortfall in their savings. And that has to come out of consumption. Almost half of the American workers have less than $10,000 in savings. Americans who make it to age 65 today can expect to live roughly 18 years more. That’s six years longer than Americans who made it to age 65 in 1940. Working Americans are, as a matter of fact, “going backward” – the first time since Social Security was passed in the throes of the Great Depression. Most Americans who were middle class when they were working all their lives are going to be poor or near-poor retirees. We’re going to have gigantic descending mobility. That you’re a middle class all your life, and you now find yourself to be really in a chronic state of want and distress about finances. And it gets worse as you get older. And Social Security – what was meant to be a backstop to keep people from falling into poverty in old age – is on the edge insolvency by 2033, according to the program’s own administrators. Social Security is not only bankrupt, but it’s also bankrupting future generations, says Laurence Kotlikoff, author of The Clash of Generations and a professor of economics at Boston University. “We’re not measuring what we’re doing to our kids. We’re not talking about who’s going to pay for a different generation’s benefits,” Kotlikoff says. “Most Americans who were middle class when they were working all their lives are going to be poor or near-poor retirees. Too many people are just not saving enough. The problem is these people are benefiting from one of the most significant shifts the world has ever seen-- life expectancy. Life expectancy, although it dropped a couple of years running recently in the US, is rising. So life expectancy in America, and across the world, is in an exponential trend higher. It is going higher and higher every single year. Obviously, the last couple of years were the opiate epidemic saw a bit of a pullback. But generally, the average American doesn't know how long they're going to live for. It's going to be longer than they thought. You see, not knowing how long you're going to live for changes your behavior pattern. It means that you start pushing out your retirement date because you don't have enough money to retire. Because if you've moved your life expectancy in five years, well then you need a lot more money. In a low-interest-rate environment, it becomes almost impossible to generate the income, so you're drawing down on capital very, very rapidly. After 2000 and 2008, the world hasn't generated enough returns. So what they've done is taken the most amount of risk possible. Typically, if you're about to retire, you should be increasing your fixed income allocation to guarantee your future retirement income. However, behaviorally speaking, if you don't have a high enough income to retire on, you have a kind of shit-or- bust scenario. What you have to do is take that risk. That risk, for American, is buying real estate, and they did that in droves back in the 2000s. Now, they got burned in that, and they don't have much net worth left in that any longer. So the real driver of net worth has been the equity market. The equity market is the only driver of net worth going forwards, and this has meant that people have doubled up their bets and tripled up their bets. They have this bet directly inequities, and they have this bet in their pension plans. The pension plans themselves have record holding of equities versus fixed income. They also have record risk in terms of credit. Private equity, venture capital, hedge funds, they all have equity-like returns. They're risk-seeking investments. And they're doing this because nobody can fund their retirement. It's the same story at government level. It's the same story at defined benefit pension level. And it's the same story for households and their 401(k)s. Corporate pension plans, they're all the same. Nobody has enough money to fund retirements. So everybody is taking the maximum risk. Now, in a rising equity market, this kind of makes sense. You're clawing back some of the ability to retire. But if things change, the picture gets a little bit worse. You see, the one bet people are making is they're actually putting the maximum allocation in all of recorded history, across the entire system, into risk-seeking, equity-like assets when equity valuations are off the charts. When we look at the chart of the median price revenue of the S&P 500, we can see it's at all times, ridiculous, record highs. We have an extraordinarily overvalued market. Now what's the worst thing about this is that there is a record over the weight of equities. Nobody has owned this many equities or equity-like instruments-- risk-seeking instruments-- ever before when the valuation is so high. That is a dangerous setup. The real problem here is it's all about the business cycle. The business cycle, as you know, ebbs and flows. It's relatively predictable-- within some boundaries. But what happens is a peaking, the booming economy eventually gives way to a recession. And they come along periodically-- every 4 to 8 years. Now what's interesting about this expansion is this is the second-equal, longest expansion in all economic history. And by next month or the month after, this will be the second-longest outright. So what that tells you is there is a probability that this expansion has to end at some point. Could it roll on for another couple of years, 2 or 3 years? Of course, it could. Could this end up being the longest ever expansion? Of course, it can. The point being is the clock is ticking, and it's moving towards the next recession. There are a lot of reasons why we have a retirement crisis, from artificially repressed interest rates to an over-reliance on government pensions. The real problem is much more fundamental: The basic idea behind government provided pensions is what makes it unstable: You don't pay taxes for YOUR retirement. You pay taxes for SOMEONE who is in retirement right now! Instead of investing in real assets that contribute to the capital stock over the decades, we transfer wealth and hope the demographics will work out. This is beyond foolish. It worked out great when it started out when the population had few old people, and everyone had kids. Today; Not so much. We could be incredibly rich today, with a far more productive economy, and the size of the next generations would be far less critical. Time to master the art of minimalism before it is too late. Do what you have to in order to put aside as close to 100% of you or your spouse's yearly income while you have the financial portion of parental responsibility. Plan to retire under the minimalism you will have accustomed yourself to and reaping the rewards of putting away for earlier retirement. That is the simple route which only you or the unforeseen can frustrate. Pay for everything in cash. Buy used if you have to. You can always upgrade when your ship comes in. Don't totally trust anyone else with your money. Check and double-check everything. Buy land. Plant a garden. Learn to cook from scratch. Learn to sew, make things yourself, repair, and maintain things. Set it up to live off-grid in case you need it. Protect your health in case you need to work longer. Live within your means. Learn to barter. The Amish have it figured out. They insure themselves, and they don't rely on the government for anything. They help each other out. They can do most things for themselves. There is no such thing as retirement anymore... corporations, banks, and politicians steal all the money and keep you working until you die. No one will ever do anything about it, so... enjoy slavery! Lessons learned: #1) you won’t be young forever. #2) live within your means. #3) save at least 15% of your income starting at age 25. #4) don’t go into debt, and if you made that mistake, pay it off. #5) pay off your house. #6) retire well. This Was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.









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“Control oil and you control nations; control food and you control the people.” Henry Kissinger


once a standing army is established, in any country, the people lose their liberty.”
George Mason

“Military men are dumb, stupid animals to be used as pawns for foreign policy.”
Henry Kissinger

“If you are an ordinary person, then you can prepare yourself for war by moving to the countryside and building a farm, but you must take guns with you, as the hordes of starving will be roaming. Also, even though the elite will have their safe havens and specialist shelters, they must be just as careful during the war as the ordinary civilians, because their shelters can still be compromised.”
Henry Kissinger

"We don't let them have ideas. Why would we let them have guns?" Joseph Stalin

The people who cast the votes decide nothing. The people who count the votes decide everything.
Joseph Stalin

Governments keep a lot of secrets from their people . . .
Why aren't the people in return allowed to keep secrets
from the government?

PHILIP ZIMMERMAN, DER SPIEGEL

“Some call it Communism, I call it Judaism.”

Rabbi Stephen Weiss

“Anti-Communism is Anti-Semitism.”
Jewish Voice, July - August 1941

Taxing People is Punishing Success
UNKNOWN

There's the rich, the poor, and the tax payers...also known as the middle class. Robert Kiyosaki

The Tax you pay is The Bill for Staying Stupid

Stefan Molyneux


“The modern banking system manufactures money out of nothing. The process is, perhaps, the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and un-mint the modern ledger-entry currency.” Major L L B Angus

The few who understand the system will either be so interested in its profits or so dependent on its favours that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests.
The Rothschild Bros

"Debts must be collected, bonds and mortgages must be foreclosed as rapidly as possible. When, through a process of law, the common people lose their homes they will become more docile and more easily governed through the influence of the strong arm of government, applied by a central power of wealth under control of leading financiers.

This truth is well known among our principal men now engaged in forming an imperialism of Capital to govern the world.

By dividing the voters through the political party system, we can get them to expend their energies in fighting over questions of no importance. Thus by discreet action we can secure for ourselves what has been so well planned and so successfully accomplished."

USA Banker's Magazine, August 25 1924


Cutting Tax Rates stimulates Economic Growth creates more Profit , more Jobs and therefore The Treasury ends up with more Tax Money
UNKNOWN

Taxation is legalized Theft
UNKNOWN

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Patriotism is the last refuge... to which the scoundrel clings .... Steal a little and they throw you in jail ..steal a lot and they make you king ....

Bob Dylan


"Corporations are stealing billions in tax breaks, while the confused, screwed citizenry turn on each other. International corporations have no national allegiance, they care only for profit." Robert Reich


There is NO political answer to a spiritual problem!
Steve Quayle


Po
litical Correctness is a Political Stand Point that does not allow Political Opposition , This is actually The Definition of Dictatorship
Gilad Atzmon

The modern definition of racist is someone who is winning an argument with a liberal
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When People lose everything and have nothing left to lose , They Lose It !

GERALD CELENTE

Your Greatest Teacher is Your Last Mistake
DAVID ICKE

The one who Controls the Education System , Controls Perception
UNKNOWN

"The world will not be destroyed by those who do evil, but by those who watch them without doing anything."

Albert Einstein

In The Left Nothing is Right & in The Right nothing is Left
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No man escapes when freedom fails; The best men rot in filthy jails. And those that cried 'Appease! Appease!' Are hanged by those they tried to please
UNKNOWN

Freedom is not Free
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Don't Steal The Government Hates The Competition

Ron Paul

"Buy The Rumor , Sell The Fact " Peter Schiff


You can love your Country and not your Government

Jesse Ventura


" The Government Works for ME , I do not answer to them They Answer to ME "
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"Tyranny will Come to Your Door in a Uniform "
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"The Government is not The Solution to our Problems , The Government is The Problem "

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"The price good men pay for indifference to public affairs is to be ruled by evil men." Plato


The world is a tragedy to those that feel, and a comedy to those that think...Beppe Grillo

"The people should not fear the government for it is the government who should fear the people" UNKNOWN

"If You are looking for solutions to the world's problems , look in the Mirror , You Are The Solution , You have the power as a human being on this planet " UNKNOWN

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"Serial Killers do on a Small Scale What Governments do on a large one..."

Serial Killer Richard Ramirez

There is a Class War going on in America, & unfortunately, my class is winning." Warren Buffet

"When the people fear their government, there is tyranny; when the government fears the people, there is liberty."

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"College is a waste of Money"
Albert Einstein

Schools manufacture people who think that they're smart but they're not.
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Education is what you learn after you leave School
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" ‏Schools were designed to create employees for the big corporations."
Robert Kiyosaki


"If a law is unjust, a man is not only right to disobey, he is obligated to do so" Thomas Jefferson

Dissent is the highest form of patriotism
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"One day your life will flash before your eyes. Make sure it's worth watching." - Gerard Way

"Aspire not to have More but to be More "
UNKNOWN

The losers in life think they have all the answers. They can’t learn because they’re too busy telling everyone what they know.
Robert T. Kiyosaki ‏

"Failure is simply the opportunity to begin again. -This time more intelligently." Henry Ford

What You Own Owns You
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If you expect the government to solve your problems, you have a problem. Robert Kiyosaki

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Be The Change you want to see in The World
UNKNOWN

Failure inspires winners but defeats losers
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“If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people” A Chinese Proverb

"First they came for the Socialists, and I did not speak out--
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out--
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out--
Because I was not a Jew.
Then they came for me--and there was no one left to speak for me." UNKNOWN