A few weeks ago a local Tennessee politician got on the air with talk host Steve Gill to explain why they sneakily increased their own pensions and attempted to hide it.
He explained that “everybody else” had cost of living increases in their pension plans.
Of course anyone with a brain - unlike this polititician - knows that “most people” let alone “Everybody” doesn’t have a fat state pension awaiting them let alone have a cost of living increase kick in to boost it.
Today the L.A. Times reminds us that many people will enter a dismal retirement. Americans can’t save enough money because taxes consume as much as 50% of our income once the effects are all accounted for.
Social security isn’t and it’s even less secure now that it’s bleeding money to pay for prescriptions which arguably do more for the health of pharmaceutical companies than the patients.
And the myths Americans believe about playing catch up… that the stock market will have an annual compound return of 20%… are just that… baseless myths about to be exploded by demographics.
The generation clamoring for stock investments who fueled the economy and drove up stock prices wants to cash in, will be spending less in the economy, and will be selling off their stock in large numbers simultaneously to fund retirement.
That’s a prescription for a stock market collapse even if you have a fat 401K!
Almost 1 in 2 American families is headed toward years of financial struggle in retirement, according to a new report that says workers are unprepared for cuts in pension and Social Security income.
Much of the pain will fall on Generation X, those born between 1965 and 1972, the report said. That’s primarily because these younger workers face the prospect of diminished Social Security income and fewer of them will have pensions.
The report suggests that Americans must save a minimum of 6% assuming their employers match 3%. Dave Ramsey suggests saving as much as 15% and is likely closer to the target in my opinion.
Start thinking of ways to create income streams in “retirement” if you want any leisure at all.
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