As defined benefit pension plans fade away, individuals are left with a much greater responsibility in terms of saving for the future. With this, many are seeking financial solutions that can provide them with not just a steady stream of retirement income but at least some degree of safety, as well. Only a handful of years ago, safety meant a 4% CD, or earning up to 2% in your money market account. Even the seemingly solid 401(k) plan have met with some degree of uncertainty as investors have come to realize that it is actually their employer and Wall Street bankers who hold most of the control of these plans, due to the significant charges and fees that have been worked into these plans.
And what about Social Security, as of today it replaces about 40% of an individual’s pre retirement earnings…..will that put a damper on your retirement, for most Seniors it does. Not to change the subject….but, What is a Ponzi scheme ?
The Securities and Exchanges Commission defines a Ponzi scheme as an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk, fraudsters focus on attracting new money to make promised payments to earlier-stage investors.
Does that not describe the Social Security system we currently have….The government takes funds from the younger generation and gives them to the retiring generation in hopes that they can continue this forever. Many estimates reveal that it has only two decades before it officially implodes.
Tomorrow, I will discuss what we can do to create a retirement income that will last as long you live…