Federal Reserve Chairman Ben Bernanke announced that interest rates will not be raised until late 2014. Screwing seniors who depend on U.S. Treasury Bonds, CD’s, and money market accounts for their retirement income, for another two years.
Retirees who depend on bonds and CD’s, to provide income for their retirements, have already suffered through four years of artificially low interest rates. The Federal Reserve is promising retirees and seniors a total of six years of pain.
Why is Ben Bernanke and the Federal Reserve keeping interest rates artificially low? To save the banks. Remember, the Federal Reserve is literally the big banks, and acts in the interest of the big banks. If the Federal Reserve allows interest rates to naturally rise, the big banks are screwed, in two ways.
First, higher interest rates will crash the housing market, as mortgage payments and the cost of borrowing go up, and the value of the mortgage portfolios the banks hold go down. Secondly, higher interest rates will also cause the stock market to fall, and along with it the stock prices of the big banks. Potentially driving big banks and investment companies into insolvency and/or bankruptcy.
How does the Federal Reserve keep interest rates artificially low? It buys U.S. Treasury Bonds through a process known as Quantitative Easing QE, or in non-fed speak, it increases the quantity of dollars. The negative downside to this policy of Quantitative Easing is inflation. The price of commodities such as gas, food, cotton, metals, orange juice, goes up.
Creating a double squeeze on seniors and retirees. Not only do seniors receive less income from their bond holdings, a larger percentage of their reduced income, will be spent on gas and food.
What can you do to protect yourself from the Federal Reserve? Your options are limited to reducing your spending to offset the loss of income and higher prices, and/or, increasing your bond holding risk to increase your retirement income. Talk to your investment adviser, we don’t sell investments or give investment advice, about high yield corporate bond funds.
While the yield on a U.S. Treasury Bond is less than 1%, the yield on the Vanguard High Yield Corporate VWEHX is currently 7.13% The Federal Reserve is hell bent on screwing seniors and retirees to bailout the banks, however, there are steps seniors can take to mitigate the financial pain.
If you find yourself at age 50 or over, with little or no retirement savings, do not give up hope. You can still retire on time if you accelerate your retirement savings plan.
Instead of saving a fixed amount each month, using the method I created in How to Save $1 Million, where you start by saving $500 per month, then increase your monthly retirement savings by $100 per month each year, you can dramatically increase your retirement savings, enjoy a comfortable retirement, and retire on time. Here is an example:
50 Year old couple Net worth $50,000 Retirement at age 62 Social Security $1,250 per month
At age 62, using the accelerated retirement savings method, the couple could have a net worth of $400,000 and be able to spend $2,750 per month when they retire. If they just save $500 per month for the next 12 years, they could have a net worth of $275,000, and be able to spend $2,300 per month at age 62.
The accelerated retirement savings method increased the amount they can safely spend in retirement by $400 per month. Either way, if you accelerate your retirement savings plan or not, you can still retire on time even if you start saving for retirement in your 50′s. Below are more articles and tools to help you achieve your retirement goals.
You see them in newspapers, magazines, and on the internet, articles listing the 10 Best Places to Retire in 2012. How do they determine the 10 best places to retire? How seriously should you take these 10 best places to retire articles? And, how do you pick the best place to retire?
The authors of these best places to retire articles try to apply science to the art of picking the best place to retire. They use several factors to make their determination; cost of housing, proximity to hospitals, weather, crime, population, cultural institutions, etc. They crunch the data and come up with a list.
One recent 10 best places to retire article in U.S.A. Today, did just that and came up with retirement locations such as Pittsburgh Pennsylvania, Lincoln Nebraska, and Pittsfield Massachusetts, where there is the highest percentage of singles over the age of 55, in case you were looking for dating action in retirement.
I don’t know about you, and no offense to either Lincoln Nebraska or Pittsburgh Pennsylvania, but neither of those locations appeal to me as a best place to retire. These criteria created annual 10 Best Places to Retire articles, may be fun to look at, but should not be taken very seriously when choosing a place to retire.
One thing most of the 10 Best Places to Retire lists include, is something you should avoid, the cost of the average house in that particular location. The lists assume you want to buy a house where you plan to retire. You should not own a house in retirement, unless you have already paid off your existing mortgage, and are currently living rent free. Why? Because moving and buying a house in retirement, even if you pay for it in cash, reduces your retirement income.
Unless the house you purchase in retirement is less than equivalent you would pay in rent, not usually the case, you will come out the loser. Other reasons why you should not buy a house in retirement are, that unless you have lived in the location for a while you have no idea what the fair value for a house is, and the good and bad parts of the city. Plus, buying a house traps you in that location, if you decide you no longer want to live there.
So how do choose the best place to retire? For a more serious, and realistic method to picking the best place to retire, read Choosing Where to Retire.
Investing is for idiots, dummies, and fools. Why? Because unless you answer yes, to any of the following questions, the odds are 90% that you will do worse by actively investing instead of simply maintaining a proper asset allocation.
Are you.. A senior executive at Goldman Sachs, J.P. Morgan, or one of the top 20 hedge funds? A senior congressperson or senator? A senior executive of a publicly traded corporation?
If the answer is no, and you are actively investing, then you are being played for an idiot, a dummy, or a fool. The market is rigged. The inside players, those listed above, already know the outcome before they invest. They are not risking their money. You, the active investor, are only suckered in to play the game after the insiders have placed their bets. Your loss is almost guaranteed.
The information you receive from the mainstream financial media is pure propaganda, propagated by Wall Street, to lure dummies, fools, and idiots into investing in the market after the insiders have placed their bets. Don’t take my word for it. Below is a video of former hedge fund manager, and financial media investing celebrity Jim Cramer, explaining to Aaron Task how he (maybe) manipulated the stock market using CNBC.
Do you have a few million dollars you can use to manipulate the stock market? Have any friends in the financial media you can use to spread rumors? If the answer is no, and you are actively investing, you are a fool, idiot, and dummy.
So, how do you save for retirement, if investing is for idiots, dummies, and fools? Asset allocation, not investing, is the secret to saving and achieving your retirement goal. Maintaining a proper asset allocation model, 70% S&P 500 stocks and 30% U.S. Treasury Bonds, beats 90% of mutual funds and money managers, and gives you 90% odds that you will not run out of savings for retirement.
The historical average annual return on this asset allocation model is 9% Read What is Asset Allocation.
With asset allocation you are not trying to outsmart investors with insider information, wasting your time reading and watching financial propaganda, or chasing the herds of idiot, dummy, and fool investors to the stock market slaughterhouse.
Is the recession causing your depression? An alarming report out of England, shows that anti-depressant use in that country has soared by 28% in the past three years, coinciding with the start of the recession.
Layoffs, lost retirements, and overall economic insecurity has sent many in England to their doctors in search of a cure for their recession depression. Here in the United States, the most depressed country in the world, where besides hypertension, depression ranks as the most common general medical issue, the baby boom generation nearing retirement has the highest rates of depression. Read more.
While the study out of England, clearly indicates a link between the economic recession and personal depression, could there also be a more correlative and direct link between perceived retirement loss and depression? Would this explain why Baby Boomers trapped in stressful jobs, a major cause of depression, with no prospect of relief are the most likely to suffer from depression?
Do you suffer from recession depression?
If so, then I have the cure for recession depression, Free Retirement Software. Download one and leave a comment for me in the morning. Most common side effects users experience are giddiness, joy, and uncontrollable smiling. Seriously, a Swedish medical study has scientifically proven that, early retirement can cure depression. Free Early Retirement Software may be the only non-medicine medicine you need to cure your recession depression.
Free Early Retirement Software cures recession depression by enabling users to control when they want to retire. Simply choose when you want to retire, and Free Early Retirement Software calculates how much you need to save each month, and how much you can safely spend each month when you retire.
As an added benefit, users of the Free Early Retirement Calculator will discover they need much less savings to safely retire compared to traditional retirement planning. Some of you, will be instantly cured of your recession depression, when you discover that you can retire today!
Example: A couple aged 55 with a net worth of $600,000, earning $80,000 per year, using traditional retirement planning needs $1,600,000 to retire. If the couple creates a $2,250 per month retirement budget, using the Free Early Retirement calculator they need $600,000 to retire, a million dollar difference - they can retire today! Can you retire today?
For many people, especially in 2012, retirement planning is their top new year resolution. If you have heard yourself saying things like “This is the year that I get serious and create a retirement plan.” Or, “It’s time to stop kidding around, we need to create a retirement plan, create a budget, and find the savings we need for retirement.”
Then I have some good news, achieving your 2012 retirement planning resolution, is now free and easy.
Free Early Retirement Planning Software 2012 enables anyone and everyone, to easily plan, manage, achieve and maintain, their retirement goal for free. This amazing new retirement software package offers something no other financial planner can, the ability to retire when you want.
When do you want to retire? With Free Early Retirement Planning Software 2012, you simply choose when you want to retire, and in less than half an hour, you can create an individual retirement plan that calculates how much you need to save each month, and how much you can safely spend in retirement to achieve your goal.
And, you get simple budgeting tools, that put you on track to achieve your goal.
If you are planning to retire in 2012, or you are already retired, Free Early Retirement creates a 30 year retirement plan that adjusts for inflation, and includes budgeting tools to insure you maintain a safe retirement.
One more pleasant surprise awaits retirement planning resolution procrastinators in 2012, the discovery that you need much less savings to successfully retire, than traditional retirement planners would have you believe.
The Wall Street Journal has a depressing article on the jobs prospects for unemployed Baby Boomers, and the impact the recession is having on Boomer retirement savings. Millions of unemployed boomers are either, delaying their retirements, eating away at their retirement savings, or taking low paying jobs to survive.
From the article it would appear that the Baby Boom Generation lost their retirements. The real unemployment rate for boomers aged 55 to 64, is 17.4%, or 4.3 million American workers. However, if you examine the article more closely, you will discover that many unemployed Boomers may have found an early retirement instead.
The depressing retirement prospects for boomers is based on the assumption, found in the article, that individuals “need retirement resources large enough to provide 85% of a person’s working income. Median households headed by a person aged 60 to 62 with a 401(k) account have saved less than one-quarter of what is needed in that account to live as well in retirement, according to Fed data analyzed for The Wall Street Journal by the Center for Retirement Research at Boston College.”
In other words, half of the 4.3 million unemployed boomers, only have a quarter of the retirement savings they need, using the finance industry standard retirement formula. The other half of unemployed boomers, have more than a quarter of the retirement savings they need, using the same worthless formula. And, that is why millions of Baby Boomers have just found their lost retirement, because the industry standard retirement is worthless.
The formula used by the financial industry, to calculate how much savings you need for retirement is worthless, because it uses a guess which can overestimate your retirement savings needs by up to a million dollars or more. Worthless, because 85% is a guess, your salary is irrelevant.
Example: If you earn $80,000 per year, the formula found in the article, calculates you will need $1,700,000 to retire. If you create a $2,250 per month retirement budget, using the Green Retirement Formula, you only need $675,000 to retire. More than a million dollar difference!
In other words, millions of boomers who thought their retirements were lost, using the more accurate Green Retirement Formula, have found their retirement dreams once again.
How much savings do you really need to retire? Can you retire today? The Free Early Retirement website has the answers, plus free software, to help you find and realize your retirement dreams. Use the links to find out.
CNN Money has an interesting article profiling several kids who are saving for retirement. Which made me think, maybe parents should skip the college fund, and instead start their kids’ retirement fund when they are born.
If you put $100 per month into your child’s retirement fund, starting when they are born until they turn 22 and get a job, then your child takes over and uses the simple savings strategy in How to Save $1 Million, they can retire early at the age of 40 with $1 million in savings.
Everything about the payroll tax holiday is a scam. From the unconvincing performance, and poor acting skills, of the White House and Republicans. To the minimal impact the payroll tax holiday will have on creating jobs. And, the fact that the payroll tax holiday robs Social Security, to give workers a meager and temporary income increase today.
You can read a good summary of the non-economic impact of the payroll tax holiday here, and watch the video above, to get an excellent summary of the political charade taking place.
To make the payroll tax holiday scam even more toxic to America’s future, the tar sands oil pipeline is being thrown into the mix, in a cynical ploy to hold a horrible idea hostage to a polluted proposal. Look, it should be obvious to everyone bye now, that the government is owned by the 1%, and together they want to rob your retirement, so it is time you Occupy Retirement.
Start by getting the tools to achieve financial freedom.
State security regulators are sounding an alarm over a surge in retirement fraud targeting baby boomers. Regulators expect to file a record number of enforcement actions involving investors over age 5o reports the Wall Street Journal. Why?
Desperate Baby Boomers nearing retirement, who have seen their retirement savings wiped out by the housing and stock market collapse, are easy prey for fraudsters promising “risk-free” high investment returns. It’s a double robbery on Baby Boomers, who were suckered into a housing and stock market ponzi scheme, and are now having what’s left of their retirement savings picked on by financial vultures.
I have some good retirement news for baby boomers, who want to be able to retire one day, but first let’s get the risk free high return investment thing out of the way. There are only two ways to get risk free high investment returns.
1. 401k Matching
If your employer offers you matching 401k contributions, for instance 25 cents for every dollar up to 5% of your salary, you instantly earn a 25% return on your investment, even if you put your contribution into a money market account.
2. Paying off Credit Cards
If you have credit cards with high interest rates, for instance a credit card charging you 18% annual interest rate, every extra dollar you put into paying off your credit card is the equivalent of earning an 18% annual return on your investment.
Those are the only risk free high return investments available to investors. Anyone who promises or guarantees a risk free return on your investment higher than a U.S. Treasury bond is either incompetent, a liar, or a thief.
Now, the good news for baby boomers who want to retire, even after the housing and stock market collapse – the thieves are lying.
One of the reasons why many baby boomers fall victim to financial con-artists, is that they believe that they need more savings to retire, than they actually need. Wall Street mutual funds and financial planners use a guess, 80% of your salary, to calculate how much savings you need to retire. It is a wildly inaccurate guess, which can over-estimate the amount of savings you need to retire, forcing you to work years longer than necessary.
Example: If you earn $80,000 per year, Wall Street financial planners calculate you will need $1,600,000 in retirement savings, before you can retire. On the other hand, if you create a $2,500 per month retirement budget, using the Free Early Retirement formula you only need $600,000 to retire - a million dollar difference!
The truth about retirement planning is that you, not your salary, controls how much savings you need and when you can retire. Believing you need a lot more savings to retire than you actually need, lures you into a high risk investments, making you easy prey for financial fraudsters promising high returns.
Why pay hundreds, even thousands of dollars to a financial planner whose odds of success are worse than a monkey throwing darts, and who gives you a worthless retirement plan? Or even worse, giving your life savings to financial fraudster, who falsely promises to make you rich in retirement? Free Early Retirement makes retirement planning free, easy, and safe.
