The Economic Policy Institute just released an incredibly persuasive article, written by Ross Eisenbrey, which gives 10 excellent reasons why the retirement age should not be raised. This short article is a must read for anyone interested in countering the arguments made by the Budget Deficit Commission and their Wall Street backers, for why we must raise the retirement age.
I would like to add 5 more reasons not to raise the retirement age.
11. Raising the retirement age is age discrimination. Forcing younger workers to work longer, to pay for current retiree benefits, is age discrimination plain and simple.
12. Raising the retirement age is bad for the economy. Raising the retirement age increases the number of workers in the workforce, exacerbating unemployment, and reducing wages for everyone.
13. Raising the retirement age is bad for the environment. More years commuting and working, extends an individual’s consumption of natural resources, increasing the rate of climate change.
14. Raising the retirement age is bad family values. Grandparents should be spending time, passing on their family values to their grandchildren, instead of passing reports in a cubicle.
15. Raising the retirement age is dangerous for public safety. 68 year old cops, 74 year old firefighters, and 85 year old airline pilots, endangers everyone’s safety.
Raising the retirement age is a bad idea for the individual, community, economy, and the environment. Instead of spending time thinking of ways to raise the retirement age, everyone would be better off trying to find ways, to lower the retirement age.
If you can think of anymore reasons not to raise the retirement age, please share them with everyone, by using the comment section below.
Former Wyoming Senator Alan Simpson, who sits on the Obama created Budget Deficit Commission to steal your retirement, made a strange comment regarding Social Security and the American people being 310 million tits.
In an email he sent to the executive director of National Older Women’s League, Ashley Carson Tuesday morning. Alan Simpson wrote, “And yes, I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits!
It’s strange statement, like Alan Simpson’s other gem “Greedy Geezers”, until you realize that Social Security is the ruling elite’s cash cow, and the American people are milking them of their cash.
Since President Regan the wealthy elite have been using Social Security as their cash cow. Borrowing from Social Security to fund their tax cuts and war profiteering. Now, under President Obama, they want to cut benefits and raise the retirement age, so they can keep milking Social Security.
Many bloggers, pundits, and members of the professional left are calling for Alan Simpson to resign, I disagree, I think Alan Simpson should stay on the Budget Deficit Commission, and continue to reveal the ugly truth behind the wealthy elites’, with the help of President Obama, final desperate attempt at class warfare against the American middle class.
With any luck, Alan Simpson’s foul temper, and language, may help put an end to the latest in a long string of financial crimes committed on the American middle class. Wall Street’s robbery of the last asset the American people have – their Social Security.
I am pleased to announce that both our website and retirement planning software package have been upgraded. Now, instead of planning and software that helps you to retire early, you can choose when you want to retire.
With this upgrade, you simply choose when you want to retire, and we create a retirement plan (actually 5 retirement plans), that enable you to achieve your goal. The software upgrade allows you to more easily and automatically achieve your goal.
The new retirement planning and software package takes the guessing out of retirement planning. You will know exactly how much you need to save each month, and how much you can spend each month in retirement, to achieve your early retirement goal. A unique approach that changes how retirement planning is done for good.
Speaking of good, we have streamlined the entire planning process, and have reduced the price of our planning software package from $89 to $49. We now offer the most accurate and affordable retirement planning available today.
Please take a look at our new website, if you encounter any problems, I would appreciate it if you would let us know.
A year ago I wrote an article, here on the Early Retirement Blog, predicting a double dip recession would begin in the second quarter of 2010. Well, the second quarter just ended, and talk of a double dip recession is reaching a fever pitch.
In this article, I am going to expand upon my double-dip recession prediction, and explain how it will impact your retirement. Why should you care what I, a relatively unknown economics blogger, has to say about the economy? I and only a handful of economists, such as Nouriel Roubini, correctly predicted the global economic collapse, the stock market bottom, and the coming double dip recession. And, my timing has been near perfect, plus, I have no agenda and charge nothing for my insights. I suggest you subscribe to this blog.
First, what is a double dip recession? A double dip recession is when the economy experiences at least two quarters of negative economic growth (a recession), followed by a short but sharp recovery, and then falls back into a deeper longer recession.
The reason why we will have a double dip recession is simple. The economic recovery we experienced, a booming stock market and stable housing prices, was caused by massive global stimulus spending and artificially low interest rates. Both of which are rapidly coming to an end.
At the recently held G-20 meeting in Toronto Canada, Europe and China announced to the world, that their deficit spending days are over. Here in the U.S., President Obama could not get an extension of unemployment benefits passed by congress, and the leaders all agreed to halve their budget deficits by 2013. Without coordinated global government deficit spending, to pump money into the economy, economic growth will collapse and recession will return.
How will a double dip recession affect your retirement? Most Americans have their net worth’s divided between housing and stocks. Both of which will get hammered by a recession. Deficit spending countries, which had been enjoying artificially low interest rates, will be forced to raise interest rates to keep funding their budget deficits. Higher interest rates, caused by the double dip recession, will crash both stocks and housing.
How can you protect yourself against a double dip recession? I don’t give investment advice, read the paragraph above, and make your own investing decisions. However, when a double dip recession does occur, retired seniors living on artificially low interest rates, will benefit as interest rates rise.
When will a double dip recession begin? It already has. We will most likely see positive economic GDP growth this quarter, Q2 2010, and if we are lucky, flat GDP growth for the third quarter of 2010, but the die has been cast for a double dip recession.
Some final notes. I have left a lot of details out of this article in an attempt to not bore the non-economist reader. However, their are many many economic and political indicators, that make a double dip recession inevitable. An article by U.S. News and World Report does a good job of listing some of the major double dip recession indicators.
Also, I would like to let readers know that none of this, not the global economic collapse or the double dip recession needed to occur. The fault for both lies squarely at the feet of America’s Wall Street controlled politicians, Republicans, Democrats, and Presidents Bush and Obama. The world has given the United States numerous opportunities to clean up it’s act. Unfortunately, a fatal combination of greed, arrogance, and incompetence, has doomed the U.S. and the world economy to a double dip recession.
House Minority Leader John Boehner, in an interview with the Pittsburgh Tribune-Review, revealed a boner of an idea. Americans need to delay their retirement until age 70 to pay for the war in Afghanistan.
“Boehner had praise, however, for Obama’s troop surge in Afghanistan and stepped-up drone attacks in Pakistan….Ensuring there’s enough money to pay for the war will require reforming the country’s entitlement system, Boehner said. He said he’d favor increasing the Social Security retirement age to 70 for people who have at least 20 years until retirement,…”
Congressman Boehner’s comments come just as I was about to publish an article titled, “Retirement or War, in which I was going to ask you, the American people, if you would like to have a retirement, or keep paying for wars? Congressman Boehner, and the Republican Party he represents, answers the question – sacrifice your retirement for war.
To be fair, it’s not just republicans, who believe that you should retire later. House Democratic Leader Steny Hoyer also thinks that Americans need to retire later. “On the spending side, we could and should consider a higher retirement age, or one pegged to lifespan; more progressive Social Security and Medicare benefits; and a stronger safety net for the Americans who need it most.”
To be even fairer, President Obama also thinks that Americans need to retire later, in order to reduce the budget deficit. His Budget Deficit Commission, created to find ways to reduce America’s ballooning deficit, does not touch the defense budget. Instead it will find spending cuts in entitlement programs, such as Social Security and Medicare, to balance the budget. In other words, Obama wants you to delay your retirement, to pay for more wars.
Bottom line, both political parties and the President of the United States, believe that Americans need to retire later to pay for war.
Fortunately, you do not need to retire later to pay for war, you can retire early. Visit the Green Retirement Website and learn how to retire early.
America Speaks, a Wall Street front group pretending to be a grassroots coalition, will be holding town hall meetings across America to engage concerned citizens on ways to balance the budget.
What is America Speaks? America Speaks is a very slick and well organized PR effort, designed to create the perception, that Americans are willing to give up their retirement benefits to balance the budget.
What is the goal of America Speaks? To balance the U.S. Federal Budget, while keeping taxes on the wealthy low, by robbing your middle class retirement benefits.
Who is behind America Speaks? A coalition of wealthy elite Americans, and trust fund babies, led by Pete Peterson.
Why do the wealthy elites care so much about balancing the budget? Simple. The U.S. can not continue running up huge budget deficits without interest rates going higher. When interest rates rise, the value of their stock, and bond holdings go down. So, to protect their wealth, the U.S. budget deficit must be reduced.
Their are three ways to balance the budget, raise taxes, cut spending, or a combination of both. Taxes are off the table. The argument from the wealthy elite will be that raising taxes hurts the economic recovery. Balancing the budget will have to come from spending cuts.
The two largest parts of the U.S. Budget are military spending and entitlement spending. Cutting military spending is off the table. Not only do the wealthy elite, who own the military industrial complex, profit from government spending on the military, the wealthy elite also depend on a strong and aggressive military to protect their global investments.
Balancing the budget will have to come from reducing entitlement spending. What is entitlement spending? Social Security and Medicare – your retirement. The reason why your retirement benefits are called entitlement spending, is because you are entitled to receive these retirement benefits from the government, after having paid for them during your working life. The government owes you these retirement benefits.
What America’s wealthy elite, who fund America Speaks, wants is for the American middle class to agree to sacrifice their retirements to balance the budget. It is class warfare.
What can you do to protect your retirement from these class warriors? Attend an America Speaks town hall meeting, and speak out against their attempt at wealth re-distribution, from the American middle class to the wealthy elite they represent.
I mentioned that “Gold tends to perform well, when there are global political and financial crises, and retirement investors should consider including gold as part of their retirement portfolio.”
Gold is at $1,200 an ounce, a 50% gain from when I wrote the gold article, and now I’m writing to warn you about a possible Gold Bubble. Why?
Two reasons why we may be in a gold bubble.
1) Everybody is talking about gold. Financial experts on CNBC who missed the housing bubble are recommending people buy gold. Annoying Gold commercials on T.V. have replaced the annoying FICO ads of the real estate bubble era. Clear sign of a bubble.
2) Their is 80 times more paper gold in circulation than their is real physical gold. For comparison, before the housing bubble crash, banks were leveraging their real estate 30 times. A lot of gold speculation taking place. Another clear sign of a bubble. If gold prices reverse, and the speculators decide to unload their paper gold, gold prices will experience a severe crash.
Gold is simply a commodity. Like what happened with oil a couple of years ago, prices can be easily manipulated, by large investment firms such as Goldman Sachs, J.P. Morgan, and their hedge fund subsidiaries. They can take the price up and down on a whim. It’s how the large investment banks make their money these days – currency and commodity speculation – pump and dump.
The large Wall Street investment banks and hedge funds, have at their disposal, the mainstream media to spread stories in an effort to drive prices. Right now, the story being told and sold, is of a collapsing Euro and dollar. And according to “financial experts“, paid shills for Wall Street, the safest way to protect yourself is to buy gold.
Financial experts are predicting Gold prices of $2,000, $3,000, $5,000 an ounce. Wall Street speculators are once again, taking advantage of investor fear and greed, in order to drive up prices before they dump their paper gold. I smell a bubble.
On the other hand, Max Keiser makes a good case, for why gold could go much higher. Besides being a hedge against inflation, and political uncertainty, gold also protects you against deflation, acting as a store of value. As overvalued real estate, stocks and bonds lose their value, gold can rise in relative value without the price of gold going up. It’s a good argument.
In any case, whether there is a gold bubble or gold is headed higher, remember that you should not be speculating with your retirement savings, in gold or anything else. Be aware that their are lots of rip-off artists getting involved in the gold mania, advertising to buy your gold at heavy discount, and willing to sell you gold at a very high premium.
Stick to a proper asset allocation model, which will give you good asset diversification, and do not chase the latest hottest investment. I do not own gold.
Update: July 1, 2010
Gold plunged $40 an ounce today, three weeks after I wrote this Gold Bubble Warning article, have gold prices peaked? I don’t know. But I can explain why gold dropped – G20. At the G20 meeting in Toronto, Europe declared that it was going to adopt austerity, in order to defend the Euro.
Much of the rise in the price of Gold came at the expense of the Euro. Worried investors had been moving their assets out of the Euro and into Gold. With Europe’s announcement that they would be defending the Euro, speculators who had been shorting the Euro and going long gold got caught in a squeeze, and were forced to bail out of their positions.
Workers in France striking to defend their retirements
(May 27, 2010) French President Nicolas Sarkozy, in an effort to reduce France’s budget deficit is planning to raise the retirement age by 1-3 years from 60, and to extend the required pension contribution period. He has said that pushing up the retirement age would be his government’s key reform for this year.
“Many people are furious that Mr Sarkozy said there was no money left to raise wages and consumer spending power, but nonetheless managed to find billions of euros to bail out floundering French banks, says the BBC’s Emma-Jane Kirby in Paris.”
Worker protests in France come only weeks after Greek workers protested violently to hold on to their retirements. In both cases, governments in Athens and Paris decided to sacrifice their citizens retirements, to placate and payoff bankers.
Meanwhile, over here in the United States, the Obama administration is openly planning to reduce the deficit by reducing retirement benefits, hundreds of thousands of state and local government workers are being laid off, those that remain are being forced to give up their pensions, and there are no significant protests, marches, or strikes, while bailed-out bankers enjoy billion dollar bonuses. Why?
Update: June27, 2010 – At least a million French students took to the streets this weekend to protest Sarkozy’s plans to raise the retirement age in France. Full Story. Meanwhile, American workers and students sit idly bye, as their retirements get twittered away.
Asset allocation is one of the most important, misunderstood, and easiest parts of retirement planning. This two-part article will describe how, in less than 30 minutes and $30 per year, you can properly allocate your assets, and have your investments out-perform 90% of mutual funds.
First, before you learn how to easily and cheaply allocate your assets, Easy Asset Allocation Part I explains what is asset allocation, how it works, and why it is important.
What is Asset Allocation?
Asset Allocation is 1) How everything you own (assets) is divided up (allocation). 2) The percentage of each asset class (stocks, bonds, cash, real estate) you own in relation to all your assets (net worth).
For instance, if your net worth is $100,000 and you have $4,000 in a checking account, $20,000 in bonds, $25,000 in stocks, $40,000 in real estate, and $11,000 in cars, couches and collectibles, your asset allocation would be:
Cash – 4%
Bonds- 20%
Stocks – 25%
Real Estate – 40%
Other – 11%
How Asset Allocation works
The goal of asset allocation is to have your assets allocated (divided up), in a mix of asset classes (diversification) that maximizes the return of your assets, while minimizing the risk to your net worth as a whole.
Each asset class (stocks, bonds, cash, real estate) have different historical rates of return, different degrees of risk, and behave differently in different economic circumstances.
For example stocks (S&P 500), which have a higher degree of investment risk, have a historical rate of return of 12%. While bonds (U.S. Treasuries), which are a safer investment, have a historical return of 6%. They also have an inverse relationship, meaning, when bonds go down stocks go up, and when bonds go up stocks go down.
If your assets are divided equally between stocks and bonds, when one of them is losing value, the other one is gaining value, and they balance each other out. So, no matter which direction the economy is going, one of your assets will be doing well. Real estate and cash, it should be mentioned, (adjusted for inflation) have a historical return of 0%.
Why Asset Allocation is Important
Failure to properly allocate your assets can lead to; not saving enough for retirement, losing your savings before retirement, not growing your savings enough to keep up with your spending in retirement, losing your savings during retirement. Failure to properly allocate your assets, can force you to work longer than necessary, or force you to go back to work after you have retired.
Fortunately, properly allocating your assets is easy, cheap and quick. Easy Asset Allocation Part II describes how to properly allocate your assets in less than 30 minutes for less than $30. And, how you can beat 90% of all mutual funds and money managers, while giving yourself 90% odds that you will not run out of money during retirement.
Get rich saving the planet? Absolutely. Here are 10 simple green ways you can save $1 million and the planet! In only 20 years, at an average annual return of 9% on your savings, you can save a lot of green by going green.
1. Bottled Water – Stop wasting money and the environment drinking bottled water. Buy a filter, water container, and fill it up before you leave the house.
Monthly Savings $40 After 20 Years $26,500
2. Brew Your Own Coffee – No more cardboard cups and plastic lids. Get a thermos and Brew your own coffee at home and at work.
Monthly Savings $50 After 20 Years $33,500
3. DIY Dry Cleaning – Expensive and toxic, conventional dry cleaning uses perchloroethylene (PERC), a chemical known to cause cancer in rats. Launder and iron your shirts and blouses.
Monthly Savings $50Â After 20 Years $33,500
4. Use a “Dumb” Cell Phone – Do you have to be connected to the internet in between home and work? Smart phones cost more, and require more CO2 producing servers, to handle the extra bandwidth required for accessing the internet.
Monthly Savings $50 After 20 Years $33,500
5. Walk Away From the Gym – Health clubs are anything but healthy for you and the environment. Requiring constant heating and cooling, and filled with germs and bacteria, walk half an hour a day in fresh air instead.
Monthly Savings $60 After 20 Years $40,000
6. Pack-A-Lunch – Fast food lunches are not only generally unhealthy, they also produce a lot of waste, and can be very expensive over time. Make and pack your own lunch before you go to work.
Monthly Savings $100 After 20 Years $67,500
7. Mini-Storage – Have a garage sale and get rid of your mini-storage unit.
Monthly Savings $150 After 20 Years $100,000
8. Grass Lawn - The scourge of suburbia, grass lawns consume precious water, require harmful chemicals, gas powered mowers, and lots of money to maintain. Convert your grass lawn to it’s native habitat, or use it to grow organic fruits and vegetables, and you will save money and the environment.
Monthly Savings $150 After 20 Years $100,000
9. Get Rid of One Car – Are you a two car couple or a three car family? If you can get rid of one of your cars, you can save a lot of money, and the environment.
Monthly Savings $400 After 20 Years $268,000
10. Cheaper Housing – Do you you really need that extra room in your home to use as an office or guest room for guests who visit one week a year? If you can downsize your home by one room, you can reduce your carbon footprint, and the amount you spend on rent or a mortgage.
Monthly Savings $500 After 20 Years $335,000
Total Monthly Savings = $1,500
After 20 Years = $1,000,000
What if you can’t squeeze $1,500 per month out of your current budget? Can you still save $1 million by going green? Yes. In a previous article, I wrote about two easy ways you can go from zero to $1 million in 20 years, by gradually increasing your savings and reducing your consumption. The $500 plan and Save Your Raise.
What if you are in your fifties, and you don’t have 20 years to save, should you bother going green? Yes again. If you follow these 10 green ways to save $1 million, and you reduce your consumption by $1,500 per month, you also reduce the amount of savings you need to retire by $450,000.
By going green and reducing your consumption, you can get rich, retire early, and save the planet.
