3 legged stool
How secure is your retirement?
I’m not the most tolerant person on the planet.
I’ll let folks cut me off in traffic. I won’t say a word as they try and take two dozen items through the ‘ten items or less’ lane. What I can’t stand is the nonsense that gets thrown around from leaders and businesses who know what they say isn’t true.
The one that got me today was at my bank: “Social Security is one part of your ‘three-legged retirement stool’ – Social Security, a Pension, and your Personal Savings.”
They’re delusional. We all know it. If you’re sixty or younger and like most Americans your “Three-Legged Stool” looks more like a stick with a burr on it.
A Pension? Where do I sign up for one of those?
Most of us don’t have a pension at all. People who , don’t usually expect it to cover monthly expenses in any real way… not surprising, considering health care costs continue to climb at three times the reported rate of inflation. The states’ pension plans are starting to look awfully shaky too. If a retiree can cash out of those as some ‘one-time-opportunity,’ I think most advisers would say they should very seriously look at doing so.
The bottom line is that if you aren’t already collecting a pension check you should be very concerned about getting what you’re expecting; if you’re planning on getting a check at all.
That’s one leg just plan gone for most of us.
Social Security? Yeah, that’ll work.
It’s broke. Haven’t we all seen the charts? It is literally burning cash every year from now until collapse. Its savings account is made up of US Government debt. Everybody trying to get elected talks about it being a crisis. Everyone who is elected seems to decide ‘it’ll be okay.’ For those keeping score at home, this is not a good sign.
Whatever it is able to pay (projected to be at a higher retirement age and at approximately 75% of promised benefits depending on your current age), it is very unlikely to be something you can count on for a meaningful retirement (nor was it meant to be).
People like to believe that even though they don’t have enough money, everything will be fine. Maybe they made bad investments. Maybe they were counting on extra earnings that never showed up. Whatever the case, a great number of people are living off Social Security right now and you don’t want to be one of them… because what they are getting relative to the cost of living is much better than what people in the coming decade and beyond will get.
Social Security will be something; but it sure isn’t a leg to bet your future on. It should be considered ‘extra’ money only. You must strive to not need a penny of it if you want to still be sleeping well in the future. If this isn’t how you feel about Social Security right now, please, study it more. Facing bad news before it hits gives you some time to plan and adjust. Hoping against all odds (and data) isn’t fun. Social Security will be ‘something’ … but it isn’t the something we have been told it’ll be.
Personal Savings – Your IRA/401K and Your Best Shot at a Retirement You Want
Now for the one leg you can count on: your own money that you control. I’m not talking about money some fund manager handles for you. I’m talking about investments you choose. Gold, real estate, a farm, equipment, private placements, offshore holdings… no one cares about your money as much as you do.
Taking some time, be that a month or a year, and learning how to take your current talents to become a better investor is the best investment you can make. If you haven’t struck out on your own yet, don’t be afraid to. Right now there are more opportunities for success than there have been in decades. You can do it.
If you are ready to take action, be that venturing out on your own for the first time, or just improving your retirement account so you can have a solid foundation to build bigger (and faster) during this window of opportunity, we’re here to help.
Anyone who posts on this thread below will receive a gift to get them started (or further along) on their journey.
Post a question you have about investments. Post why we’re wrong and Social Security will magically be okay. Post what you’re doing outside the stock market and what you think of it. Just start taking action. Those that don’t will suffer tremendously in the coming years, and those that do will be rewarded greatly for their effort.
