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"The Retirement Crisis Is About To Spark The Most
Dramatic Shift In The Standard Of Living Ever Seen"
by Epic Economist
"Retirement today is very different from what it was just a few decades ago. Previous generations could actually count on a solid pension, healthcare benefits for themselves and their families, a much lower cost of living, and stronger purchasing power. Unfortunately, for the vast majority of Americans, that’s no longer the case. Employers are cutting back on retirement plans, individual healthcare costs are at the highest levels they’ve ever been, economists fear the return of hyperinflation, and the stock market just wiped out $3 trillion from U.S. retirement accounts. To make things worse, while the rate of Americans that are, or will be, able to retire in the future keeps going down, the rate of people that expect to work their entire lives is growing at an alarming pace.
The current economic downturn is preventing millions of Americans nearing retirement ages to save money for their future, with many of them having to tap into their retirement accounts to be able to make ends meet. Soon, our society will have an overabundance of people reaching their senior years without the ability to fully provide for themselves. Social Security benefits may not be around anymore, and all of these people won’t have a backup plan to count on, making them vulnerable to experiencing a dramatic decline in their living standards. This crisis is getting worse over time, and the latest stock market losses are here to show us that even if you play by the rules and do everything right, you are still at risk of losing everything and see your golden years being turned into your darkest years.
According to the Center for Disease Control, the average life expectancy at birth in 2020 was 77.3 years. Most of us would like to retire as early as possible. For example, if you’d like to retire at 62 years of age, you would need to have at least 15 years' worth of funding saved up. However, the latest data from the Center For Retirement Research at Boston College reveals that only 46% of Americans will have enough to maintain their planned standard of living when they retire, meaning that 54% of Americans don’t have enough savings to support themselves during retirement.
That’s why many people will have no choice but to continue working to survive. Today, 41% of those who do have a retirement, contribute to a 401(k) plan, which is the main channel through which most Americans are exposed to the ups and downs of the stock market. Nearly three-quarters of all 401(k) money is held in stocks, according to a Vanguard report from 2021.
We have seen what all of this exposure did to millions of retirement accounts in 2008. Over half of American families saw their net worth plummet along with the stock market. Many of these accounts were completely wiped out. Now, we’re witnessing a repeat of that same disaster. And the fact that more people aren’t talking about this is truly stunning. In the first half of 2020, the stock market selloff literally erased over $3 trillion from U.S. retirement accounts!
And now that the housing market is in free-fall, this crisis is set to get exponentially worse as homeowners watch the value of their properties - oftentimes, their main financial asset - taking a massive hit. Americans old and young will all be impacted by this. The future of our entire nation is on the line – and when things start crumbling down all around us, no will have doubts that the so-called “doomsayers” were actually right: we are indeed in the middle of an epic economic collapse."
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