Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy Government PANICs! Sterling Collapses! - 19th Mar 20
Coronavirus Market Crisis - Nowhere to Hide! - 19th Mar 20
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 - 19th Mar 20
How COVID-19 Leads to 2008-Style Bank Crisis - 19th Mar 20
Coronavirus Impact on Global Economic GDP Numbers - 19th Mar 20
Bticoin Crash Big Channel Review - 19th Mar 20
Gold is Doing Its Job…Silver Will Come Back as a Safe-Haven Asset - 19th Mar 20
The Chartology of Coronavirus Deflationary Event - 18th Mar 20
Fed Slashes Rates to Zero and Introduces QE in Response to COVID-19. Will Gold Rally Now? - 18th Mar 20
Coronavirus - Nothing to Fear but Fear Itself - 18th Mar 20
The Stocks Bear Market Is Upon Us... Or Not - 18th Mar 20
US and UK Coronavirus Containment Incompetence Resulting Catastrophic Trend Trajectories - 17th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Don’t Plan on Being Retired Very Long

Personal_Finance / Pensions & Retirement Aug 15, 2013 - 11:36 AM GMT

By: Don_Miller

Personal_Finance

I don't know which is worse: realizing you cannot keep a promise you made to someone who was important to you, or being the person who relied on the promise when you finally grasp that it is not going to be kept.

In 1973, I was 33 years old, just getting started as a public speaker in a career that would span another 30 years. I was asked to join the National Speakers Association and became a charter member. Our first president was the late Bill Gove. Bill was a terrific speaker and also a great salesman—one of the top life insurance salesmen in the country for many years.


One of his favorite lines was quite telling about selling life insurance. He would ask his prospect, "How much life insurance do you have?" The person would tell him. Bill would pause, get a funny look on his face, and deliver the punch line as a question: "You don't plan on being dead very long?" Every time I saw him deliver that line, the audience would roar.

Were Bill alive today, he would likely be selling annuities to those same clients. I don't understand why insurance companies don't call annuities "enjoying-life insurance." If they did, they would probably sell more. Somehow I can't see Bill in front of an audience telling a story of asking a prospect about their retirement portfolio, and then delivering the line, "You don't plan on being retired very long?" My guess is the audience would shift from one side to another in their seat and perhaps chuckle uncomfortably. What's the difference? An entire generation would know he is right; we are very uncomfortable about having enough money to truly enjoy retirement.

So what has changed since 1973? Most of us never thought too much about retirement when we were younger. In the 1970s, if you worked for the government, were a union member, or worked for a medium to large corporation, there was a good probability that you were guaranteed a pension if you worked there for any length of time. Couple that with Social Security and you could enjoy retirement. My dad had two pensions—one from the State of Illinois and another from the post office—and he did just that.

During my career, I trained salespeople and managers. One of my teaching points was emphasizing to salespeople not to exaggerate or overpromise to their clients. I told them: "Don't let your hippopotamus mouth overload your hummingbird ass!" That line certainly got their attention. The adverse consequences of being unable to keep a promise in the marketplace can be devastating. They can include the loss of a client, but also in many cases the loss of your reputation.

The corporate world, many unions, and federal, state, and local governments are all guilty of doing just that. They made pension promises to their employees that they just could not keep. I had a good friend who became a senior pilot at Delta Airlines and was quite proud the day he flew his last flight into Atlanta Hartsfield Airport. They had the customary fire hoses greeting his plane and a big retirement party. Less than two years later, Delta filed for bankruptcy, the government took over its pension obligations, and his pension was drastically reduced. Sad to say, he passed away within five years.

I found it interesting to read the current Employee Benefit Research Institute Retirement Survey. It reported that only 3% of employees in the private sector have a pension plan. The rest now have some sort of savings plan, like a 401(k). Corporate America has successfully unraveled from its pension promises in two ways: either companies bellied up and shifted the pension liability to the government; or they transferred the responsibility back to us as individuals. It is now our job to worry about our own well-being. In effect, companies are now just voluntary administrators of a voluntary savings plans for their employees.

While corporate America made promises it could not keep, at least most companies 'fessed up to the economic reality, explained that making good on their promises would force them into bankruptcy, and found a way to get out from under those commitments.

Our government is doing the opposite of 'fessing up. While corporate America is unraveling from economic promises it could not keep, governments big and small are doing the opposite. In addition to their generous pension plans, we all now have health care (even those who are not citizens), food stamps, longer-term unemployment benefits, etc. The list of promises goes on and on. It seems the government has its hippopotamus mouth going full blast in every election cycle, making promises to win elections.

Those who try to speak up (see Ron Paul) and point out that those economic promises are going to bankrupt us all are criticized and ridiculed. Unfortunately, there is one major difference between corporate America making promises and the government doing the same thing: the government is making promises it cannot keep with our money! It is driving us into bankruptcy. When that happens, normally the value of the currency will collapse, destroying the wealth of seniors and savers in the process.

While it may be bleak, it is not hopeless. I recently read John Stossel's latest book, No, They Can't: Why Government Fails—But Individuals Succeed. The book outlines our current predicament in very easy-to-understand terms. At the same time, it strengthened my personal resolve. It gave me hope... a funny choice of words, as I think about it.

Every day, more and more people are seeing these promises for what they really are: hollow and illusionary. There is no point in debating whether they were made in good faith or not. Who the hell cares? The real issue is: they are promises that are financially impossible to keep.

John's book reinforced what I already knew: Americans are a hardy lot, and a lot of us succeed in spite of horrible obstacles placed in front of us. The first step is to pop the illusion bubble, accept the responsibility for our own retirements, and get on with the job.

While it will take a lot more than a simple annuity to get the job done, there are always opportunities for educated, take-charge investors to survive when they put their minds to it.

Oh, and to address the question I asked in the first paragraph. Being concerned about having to break a promise you made is only important to those with a conscience—not the kind of people who will just tell folks whatever they want to hear. Guess what? We are on to their game and can thrive without counting on their phony promises.

I was so impressed with Stossel's book that I invited him to join us for an exclusive discussion on the challenges facing seniors. He'll be joined by a panel of experts including David Walker, former Comptroller General of the United States, and Jeff White, president of American Financial Group, to give you practical solutions to today's financial challenges.

Our event, which is titled America's Broken Promise: Strategies for a Retirement Worth Living, is free and premieres on Thursday, September 5. Click here for all the details and to reserve your spot.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Meremortal
15 Aug 13, 18:53
It's up to me, and you.

I decided in 1978 (at the age of 29) that depending on govt or anyone else for my retirement was much too risky. I started a 30 year program of living below my means and investing the disposable income so generated. My wife and I retired at 60 (she was 53) and at 64 have not started taking SS yet.

Why anyone would trust their financial future to outside entities is beyond me. If you are young, start building passive income streams now or cry later.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules