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Will Your Retirement Efforts Achieve Escape Velocity?

Will Your Retirement Efforts Achieve Escape Velocity?

Sadly, most of us will outlive our savings

The concept of ‘retirement’, of enjoying decades of work-free leisure in your golden years, is a relatively new construct. It’s only been around for a few generations.

In fact, the current version of the relaxed, golfing/RV-touring/country club retirement lifestyle only came into being in the post-WW2 boom era — as Social Security, corporate & government pensions, cheap and plentiful energy, and extended lifespans made it possible for the masses.

But increasingly, it looks like the dream of retiring is fast falling out of reach for many of today’s Baby Boomers. Most will outlive their savings (if they have any at all).

And the retirement prospects look even worse for Generations X, the Millennials, and Gen Z.

A Bad Squeeze

While the US enjoyed a wave of unprecedented prosperity throughout the 20th century, the data clearly shows that halcyon era is ending.

Real wages (i.e., nominal $ earned divided by the inflation rate) for the average American worker have hardly budged since the mid-1960s:

Yet the cost of living has changed dramatically over the same time period. Note how the rate of increase in the Consumer Price Index (CPI) started accelerating in the late ’60s and never looked back:

Squeezed between stagnant wages and a rising living costs, perhaps it should be little surprise that so many Americans are having difficulty finding anything left over to save for retirement.

We’ve written about this extensively in our past reports, such as Let’s Stop Fooling Ourselves: Americans Can’t Afford The Future and The Great Retirement Con. But as a way of driving the point home, here are some quick sobering stats from the National Institute On Retirement Security:

  • The median retirement account balance among all working US adults is $0. This is true even for the cohort closest to retirement age, those 55-64 years old.

…click on the above link to read the rest of the article…

Can We Harness Americans’ Retirement Savings to Create Local Sustainable Economies?

What would it take for you to pull your retirement savings out of Wall Street and invest it in things that enrich your local community? Could you invest your IRA or 401(k) in, say, a local farm, solar cooperative, worker cooperative, or housing cooperative?

These questions are so worthy of answers that 15 volunteers and staff of Sustainable Economies Law Center gathered last year for a day at the law library to imagine and design a cooperative that would enable everyday people to direct their retirement savings into local investments. We sought to understand the applicable financial and tax regulations and assess the possibility that ordinary people could come together and form the required custodial entities to enable self-directed IRAs for themselves and their communities. Our key takeaways were: 1) It would be challenging, but not impossible; and 2) There’s so much we can do in the meantime!

This year, we’re continuing our study. While this is a work-in-progress, here are some early conclusions:

  1. Self-directed IRAs have made a visible difference in my community. In 2012, I provided legal services to an organization called Wild & Radish when they acquired 10 acres of land. Now, that land has vegetables, fruit trees, goats, bees, and an ecovillage, and it has become the home base for one of the Bay Area’s most inspiring nonprofits, Planting Justice. It is also home to a heritage seed farm operated by Multinational Exchange for Sustainable Agriculture. To help make the substantial down payment, Wild & Radish and Planting Justice received five loans, totaling $90,000, from the self-directed IRAs of their fans and supporters. The lenders have been repaid on schedule with 3-4% interest. However, the return on investment is far greater, because, five years later, I can think of countless ways these groups have enriched the life of our community.

…click on the above link to read the rest of the article…

The Boomer Retirement Meme Is A Big Lie

THE BOOMER RETIREMENT MEME IS A BIG LIE

As the labor participation rate and employment to population ratio linger near three decade lows, the mouthpieces for the establishment continue to perpetuate the Big Lie this is solely due to the retirement of Boomers. It’s their storyline and they’ll stick to it, no matter what the facts show to be the truth. Even CNBC lackeys, government apparatchiks, and Ivy League educated Keynesian economists should be able to admit that people between the ages of 25 and 54 should be working, unless they are home raising children.

In the year 2000, at the height of the first Federal Reserve induced bubble, there were 120 million Americans between the ages of 25 and 54, with 78 million of them employed full-time. That equated to a 65% full-time employment rate. By the height of the second Federal Reserve induced bubble, there were 80 million full-time employed 25 to 54 year olds out of 126 million, a 63.5% employment rate. The full-time employment rate bottomed at 57% in 2010, and still lingers below 62% as we are at the height of a third Federal Reserve induced bubble.

Over the last 16 years the percentage of 25 to 54 full-time employed Americans has fallen from 65% to 62%. I guess people are retiring much younger, if you believe the MSM storyline. Over this same time period the total full-time employment to population ratio has fallen from 53% to 48.8%. The overall labor participation rate peaked in 2000 at 67.1% and stayed steady between 66% and 67% for the next eight years. But this disguised the ongoing decline in the participation rate of men.

In 1970, the labor participation rate of all men was 80%, while the participation rate of women was just below 43%.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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