Red Pill Money: Modern Dreams of Retirement Are Another Ponzi Scheme
America is full of myths that are being exposed as mirages in the early 21st century. One of the biggest promises that got broken was the promise of a decent life for those who go through the enormous expense of college, as well as spending 4 to 6 of the best years of their lives studying rather than enjoying their youth. College graduates are now woefully underemployed, and that’s if they’re lucky enough to get a job at all. That’s one bubble waiting to pop.
But the broken promises will only get worse as the nation is sold out by globalists and their prostitutes, otherwise known as politicians. Retirement is the next big mirage on the horizon. The illusion of the happy retirement looks increasingly like another corporate-government complex Ponzi scheme. The current Social Security and 401k retirement plans fit the definition of Ponzi scheme perfectly:
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors.
Isn’t that the very definition of the fantasy currently being sold to workers by cleverly amoral government bureaucrats and investment company PR flacks? Even Forbes magazine is noticing Social Security looks a lot like a Ponzi scheme.
Moving Away from Pensions to 401k Plans
Pensions, long funded by companies to give their employees a modicum of decency in their Twilight Years, died in the 1980s to be replaced by 401k plans, which boldly claim that if people tuck away 5% of their income for their entire lives, the miracle of the stock market will make them millionaires when they turn 65. Meantime, we aren’t supposed to look at our 401ks and notice the growth just isn’t there. Helaine Olen, author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry explains the end of pensions came about as yet another selling out of the working class:
What essentially happens is that the 401(k) comes in in the late ’70s, early ’80s. It starts as a corporate tax dodge, basically. It’s if you’re a high earner, you’re going to put some of your money aside. Nobody ever thought that this was going to apply to the rest of us. I mean, there was never any thought of that.
As Olen says, 401k plans were a system designed for high earners, not your average Joe making $43,000 a year or so and struggling to get by paying ever-soaring rents, taxes, and overall cost of living. As any rational person would expect, many people are finding their gains for retirement aren’t keeping pace with inflation, let alone making them rich when they go to cash out. Olen continues:
Most financial planners would say you need about $1 million to ensure a decent middle-class retirement. Absolutely almost no one is there right now.
So, just how badly is the new retirement scheme faring? The numbers are frightening. Most people will be able to retire at age 65 and hope they’re dead by age 67, assuming a retirement income of only $25,000 a year.
According to an EBRI [Employee Benefit Research Institute] survey conducted last year, 66% of workers have saved less than $50,000 for their retirement. And 28% have saved less than $1,000. Good luck with that.
But that’s okay, Social Security will come along and save us, right? No, it won’t. Even though the system is funded with workers’ money and IS NOT a welfare program, it has turned into a welfare program because politicians have been raiding the Social Security Trust fund for decades. As Forbes reported:
“The Social Security trust fund is a fiction. In other words, the Social Security trust fund contains nothing.” The federal government has borrowed all of that trust fund money and spent it. And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money.
Quantitative easing, i.e. printing money out of thin air will only get you so far. We are already reaching the tipping point in America when it comes to the Social Security and program. Forbes warns:
The system is already bust. More money is going out in benefits and overhead ($714 billion a year) than is coming in from payroll taxes ($646 billion). For now, the government is covering the shortfall the way it pays for other things: by borrowing, collecting income tax and printing money.
Translation: Aunt Sam wasted the money it forcefully took from people, promising to pay their retirement in another of its grand socialist schemes. But, even the Social Security administration admits it won’t be able to pay benefits starting in only 20 years.
As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted. At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits.
In other words, the generations born after the Baby Boomers are fucked. MarketWatch is sounding the alarm now, but few people are paying attention as most Americans continue floating around like mindless blimps in food and football induced comas.
Everybody sensible knows we are facing a looming retirement crisis. Tens of millions of baby boomers are starting to retire. They are going to live in old age far longer than previous generations. Tomorrow’s grandma is going to need medical care and nursing care beyond the imagination of grandmothers of yore. Yet so few people or families have saved anywhere near enough. And our public safety net is poorly managed, ill-thought-out, and threadbare.
Waiting on the government to fix the situation amounts to insanity. The time to take action is now.
Old and Broke
Summing up the ineptitude of the current 401k system and the Social Security Administration to provide reliable retirement for the average person born after the Baby Boomer generation, the frightful bottom line is given to us by Boston College.
Based on current projections, about half the country is at risk of being unable to maintain their standard of living in retirement. Among low-income workers that rises to 60%. But it’s 40% even among the higher-income workers.
So, it is utter insanity for men to keep paying into this system and expecting to receive a figurative gold watch and literal retirement at the end of their careers. The advice of The New Modern Man is to take action, and take action now if you’re still young enough to have a decade or more before retirement.
Don’t be the average idiot with no money in savings, living paycheck to paycheck, expecting Big Daddy Government to take care of them. It’s time to go minimalist, cut out out the fat from your budget, and relentlessly save and invest at least 50% of your income before the system begins falling apart. Once the masses start realizing Social Security is going to be insolvent in only 20 years and their 401k plans are not going to allow them to retire, there will be a financial crisis in the U.S. that will make the Greek austerity crisis look like a cake walk.
Combine that with a massive welfare state and a looming student loan crisis, the weight of the retirement crisis along with these other two forces will be enough to break the back of the U.S. economy. The smart men will start making preparations now instead of waiting on more false illusions and broken political promises to come to fruition.
Don’t expect the government to take care of you. Build up a massive nest egg, and be ready to cash out of the U.S. economy when the inevitable comes. Optimism is cowardice, and happy endings are for sappy Hollywood movies. Sometimes, things don’t come to a happy end when the economy and the human machines powering it are repeatedly sold out by elite puppet masters.
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