A lot of people in the US put a lot of effort into planning for retirement. They save and try to invest money for the golden day when they will no longer have to go to work to earn a living. After all, their parents and grandparents retired, why couldn’t they retire?
Personally, I think retirement is a fallacy that has been promoted in the last 70or 80 years. I don’t think we were made to retire and just quit being productive. Sure, people may need to change vocations or slow down a little, but what are people supposed to do if they just stop working?
I also think a lot of people who try this, die soon after. I love to vacation, but I can’t imagine vacationing all of the time. I think you would soon quit looking forward to it.
Now as far as the funds for retirement, there are private funds and there is Social Security, which every self-employed person hates because of the huge chunk it takes out of their earnings. By the governments own admission, Social Security is set to run out of excess funds in about 20 years.
That is if all of the funds in it that have been borrowed out, get repaid so that it can pay out benefits. Social Security is invested in Treasury bonds, which are basically IOU’s by an already broke government.
Many private pension plans are also in trouble. Many of them are set up to be solvent if they can maintain an investment return of 8%. That is extremely hard to achieve in today’s world with over 13 trillion dollars worth of negative interest rate bonds.
On top of having problems funding retirement, inflation will compound the problem. Inflation is a consistent way of eating your savings and increasing the amount of money you would need for retirement.
By the way, you can’t trust the governments figures for inflation. They change the way they calculate it to keep the number smaller. If you went by the way they calculated it in the 1980’s, inflation would be over twice as high as it is now.
People think that if they invest in the stock market, it will keep going up like it has for the last 30 years. Corporate profits are falling, so the markets are going up just because people think they should. That could fall apart in a short time.
With the record low interest rates, Baby Boomers retiring quickly and a slowing world economy, I wouldn’t plan on being able to retire and live comfortably for the next ten or fifteen years. Find some productive work you like to do and do it for life.
Our government is broke and our money system is broke. It is only a matter of time until it affects your lifestyle. Sorry about the bad news, but you can still do something about it.