If you are reading articles about retirement, make sure you read our eBook, 5 Frightening Facts about Retirement in America. It takes no more than 10 minutes to increase your awareness of key facts that impact the achievement of your retirement goals.
Why are these five facts frightening? They can destroy your dreams of a secure, comfortable retirement.
- Increased Performance
You have read a lot about people living longer, but have you applied that fact to your retirement plan. If you retire at age 65 you or your spouse have a good chance of living well into your 90’s. This means your assets have to produce income, retain their purchasing power, and preserve principal for 30 years or more. That’s 30 years of inflation, recessions, rapidly rising healthcare costs, stock market declines, fluctuating interest rates, wars, global economics, political scandals, the pending collapse of social security, and a rapidly rising national debt of $17 trillion.
- Stock Market Crashes
The two most recent stock market crashes occurred in 2000 (Internet Bubble) and 2008 (Toxic Mortgages). Future crashes are inevitable. Rising stock markets produce excessive P/Es that are followed by corrections (losses of 15% or less) and crashes (losses of 16% or more). What is most ominous for current and future retirees is the number of years it takes to recover from crashes.
Future retirees, who are solely responsible for their own results, will have to take more risk because they need higher performance to offset the four primary types of erosion that impact retirement assets.
- Total Return Investing
In the past, retirees limited their investing to bonds to avoid the volatility of the stock market. But, low interest rates the past few years have made this strategy obsolete.
- Wall Street: Myths and Realities
There are three Wall Street myths that advisors use to sell investment and insurance products. Myths are myths, but they sound real when they are presented by a personable advisor who has strong sales skills.