HOW TO PROTECT AGAINST THE BIGGEST MISTAKE IN THE HISTORY OF FINANCIAL PLANNING
There are lots of things one could point to as huge financial planning mistakes as we leave the stable markets of the past and enter the extreme market volatility of the future. The 4 obvious ones are:
- buy and hold investing
- believing you’re going to get an 8-9% average annual return in the stock market
- not properly factoring in inflation or deflation (speaking of deflation, don’t look for the Fed to raise interest rates by more than a whisper for at least the next 7 years)
- not having a portfolio that can make money when the market is going down as well as when it’s going up
But the biggest mistake of all is one that’s being made by all but a handful of financial planners and estate specialists: Ignoring Extreme Longevity We’re not talking about living to 100 (that’s going to be child’s play), we’re talking about upwards of 150 years to possibly more than double that—in terrific health. More details on this a little later. But while this is fantastically good news for you, U.S. Government actuaries, like their counterparts in the private sector, have grossly underestimated how long healthy people today are going to live, keeping themselves myopically anchored to the Social Security tables that predict a male reaching 65 will live to 84.3 years and a 65 year old female will live to 86.6 years. To their way of thinking, government tables can’t be wrong and so this is what they use to formulate their actuarial assumptions for pension plans, annuities, Social Security payments, etc. Can you see why the Social Security trust fund is in trouble? They just don’t get it (or maybe don’t want to) because, after all, they don’t have the money to pay benefits for all these additional years. They’re broke. The federal government is broke (in order to save money, it will pay no increase to Social Security recipients in 2016 since there is “no inflation” and only .02% in 2017). The states are broke (California is $198 billion in the red on its pension funds as of 2013). Cities are going broke (Detroit ring a bell?). Private pension funds are going broke (400,000 retired Teamsters just received a mailer telling them to expect up to a 50% decrease in benefits in the future). Puerto Rico is bankrupt and currently lobbying the U.S. Congress to bail it out ahead of complete collapse. There will be many more to follow. What happened:
- they didn’t assess the new investment environment correctly, and this inability to adjust to the roller coaster markets of the future means they’re no longer able to produce adequate retirement income streams that the retirees/recipients they support are counting on
- Shockingly, the average rate of investment earnings for pension funds for fiscal '16 was just announced: .9%! (hope you were sitting down for that one)
- secondly, they were clueless as to the impact of AI (artificial intelligence) on human longevity (expect aging to be reversed within 20 years---if you’d like more info on what’s really happening in the anti-aging/longevity arena, visit our site and email us a request for a special report on the real players in the anti-aging revolution).
Consider this quote by the CEO of a cutting-edge company with plans to eradicate atherosclerosis, Alzheimer’s disease, rheumatoid arthritis, Parkinson’s disease, and a host of other debilitating diseases (maybe before the end of 2017): “If pharmaceuticals were enough, the USA would not have the most medicated people on the planet and a society that is still dying of the very diseases that they treat.” Think of it another way: the U.S. has 5% of the world’s population, but takes over 50% of the world’s pharmaceuticals. But that has all begun changing within the last few years because we are entering an era of huge leaps in life span (coupled with vibrant health) due to many factors-- but one in particular: Artificial Intelligence. The application of AI (Artificial Intelligence) to developing cures for what ages us is truly mind-boggling. Consider this: there are AI computers that can solve a problem in 6 seconds that would take a human being 400 years to solve. And they have now been turned loose on developing a cure for the disease known as aging. Why, you may be asking, is this not good news? While it certainly is in one regard (you’re going to feel younger and more active and vigorous for many, many more years), it’s a catastrophic problem for Uncle Sam, insurance companies and others who have over promised on income you will be paid at a certain point in your life (i.e. retirement or an annuity contract’s annuitization date). They are terrified because the money simply isn’t there.
In Uncle Sam’s case, he’s (read we the taxpayers) $206 trillion in debt counting current debt plus off-the-books budget items such as Social Security payments, government employees’ pension obligations, military pensions, Medicare, etc. (this, according to Prof. Laurence J. Kotlikoff of Boston University). The longer people live, the more money that has to be paid out---money that is no longer there. As a matter of fact COLAs (cost of living adjustments to pensions, etc.) for 2016 will be cut to the bone or, in the case of Social Security, there will be no increase! According to our friendly government actuaries, there is no need to raise payments because there is no inflation. The government makes its case based on the decrease in the price of oil and its impact on the inflationary basket of goods that comprises the inflation index. And for 2017, the planned increase is .02 %! That’s only $3.60 for an $1,800/mo benefit! Of course, this is patently ridiculous, but think of the money that can be saved by stealing from Social Security, military pensions, state and local pension plans, etc. that have a COLA component.
This money can then be used to buy votes by redistributing it to politically correct voting groups. So, what does Uncle Sam do now that the coffers are empty? It’s simple but profound: force interest rates down to the lowest levels possible to keep cost of living increases minimalized; in 2015 Social Security recipients received a cost of living increase of 1.7% while the real rate of inflation, according to the excellent website shadowstats.com, was actually around 9.2%. By manipulating the numbers, and paying increases based on a fraudulent inflation rate, the government saved about 7 ½% on its payout to Social Security alone, a huge amount of money (the same savings applied to the military, government pensioners, etc.--- you get the point). This will allow the government to:
- Keep interest rates down for as long as possible to minimize the repayment costs of all its debt (bonds) owned by other countries---China alone owns over a trillion dollars of U.S. treasuries—and possibly pave the way for negative interest rates for U.S. savers
- Keep raping savers and conservative investors by forcing them into the stock markets to look for yield, thereby propping up the big investment banks and Wall Street
The days are gone when fixed payments (even those with supposed COLAs attached to them) are going to be able to keep up with the cost of living in the real world. Other sponsors of grossly underfunded pensions and guaranteed income contracts, like some insurance companies and state and local pension plans, will probably have to cut back on increases as well, especially if they’re projecting historical earnings of around 7-8%/yr. return on their investments, and not the +1 % to possibly negative -1 % per year they’re likely to earn for at least the next decade. Yes, you read that right. A more detailed explanation can be found at Retirement Income Timer along with possible solutions. (www.retirementincometimer.com) But the trend is clear: the party’s over. The new order of business: bankruptcies by local, state and federal entities, as well as private pension plans, because of obligations they can’t meet.
Don’t believe it? Talk to the 400,000 Teamsters getting a major financial haircut from their pension plan; or those retiring from service to the city of Detroit who took a financial spanking because of Detroit’s bankruptcy, or even thousands of J.C. Penney employees who recently accepted buyouts as J.C. Penney had to cut about 40 % of its pension obligations. Severe liquidity problems in many quarters of the insurance market (annuities), including long-term care contracts, only add to the seriousness of the financial turbulence ahead. While it’s true if your insurance company fails you would gain some protection from the state its headquartered in, or another company taking it over, there may not be a guarantee of 100% of your benefits being paid in every instance. Also, in the case of contracts that haven’t begun payouts yet, the growth rate on earnings may slow to the point that that they will only be paying out the guaranteed return (in many cases, 2% annually or thereabouts). The 3 keys to protecting your retirement income needs:
- stay healthy enough you never need to go in a nursing home or assisted living facility (at an average of around $80,000 per year nationally, nursing home costs will bleed your retirement account dry in much less time than you think)
- create a diversified, flexible investment portfolio that can make money in both up and down markets, protecting and growing your long-term wealth (remember: if you can consistently make 10.0%/year on your investments, you can double your money approximately every 7.2 years); gold, real estate, currencies, etc. all have their place
- plan on continuing to work for many, many more years—thereby preventing the need to dip into your assets to cover current expenses
It’s this simple: there is a huge deflationary wave headed our way that’s going to change the investment markets radically in the years ahead. If you’re not positioning yourself with a financial plan that can keep pumping out retirement income for you far longer than you imagined (and at a higher rate than the old standbys of the past---CDs, money markets, bonds, etc.), you may fall prey to having to continually raid the coffers just to keep up with today’s expenses and eventually deplete your assets about the same time you find you have another 100+ years to live. Think we’re exaggerating? There is a group of top scientists and researchers who have put together the game plan to reverse aging in less than 20 years. Not just stop aging---they can pretty much show you how to do that today---but completely reverse it so you can begin to physically grow younger.
Think of an hourglass with more grains of sand being poured into the top half than are coming out the bottom half. (If you’d like to learn the secrets that most people have no clue about, go to our Retirement Income Timer Contact Page and email us your request; we’ll be glad to show you how to get in touch with these anti-aging insiders). You’ll also learn about another company known to only a handful of people that recently delivered telomerase into a human subject using the AAV9 vector; keeping your telomeres long (they’re the little caps on the ends of your DNA strands) is considered by many scientists to be the key to stopping aging. This procedure is extremely controversial and was not done in the U.S., although AAV9 is being employed in several FDA drug trials for Alzheimer Disease and some other debilitating diseases. If this trial is successful, aging—as a disease—will have been defeated and the notion of reverse aging will be a reality; imagine being able to grow younger, not older, and remain healthy for possibly hundreds of years. And this company could make it happen in less than the 20 years suggested above! While this first patient’s treatment will be prohibitively expensive for most of us, the company’s passion will be to drive the price low enough that it will be affordable to most of us (including through medical tourism programs).
This is the future; the anti-aging and longevity genie is out of the bottle and even the government can’t stop it, as much as they’d like to. And we’re absolutely sure you know this to be true. How? You were smart enough to find this article and curious enough to have read this far. And you are intellectually adept and able to strategize how to deal with the future—so you know there is no more traditional retirement for middle class America. Kudos to you, but there’s one other thing to do now to be sure you’re keeping yourself healthy for the next decade or two until reverse aging becomes a common phenomenon for millions of people. What’s that? Be sure you’re availing yourself of the future of medicine today, not letting yourself get sick or possibly die before the door to an unimaginable future is opened to you. Click here to be taken to the Life Extension Foundation’s website. Once there, click on MAGAZINE in the upper left to view recent issues of their cutting-edge publication. And then, click on HEALTH and you’ll be able to access state-of-the-art medical information about conditions that concern you and how to address them without relying on often harmful and unsuccessful pharmaceutical drugs. Most doctors are not aware of these powerful strategies, but now you will be. There it is, the biggest mistake in the history of financial planning: grossly underestimating how long you’ll live, how healthy you will remain and why, because of that, you must have an investment portfolio that can make significant profits when an increasingly volatile market is experiencing its inevitable down cycles. The time to start planning for a way to defeat the consequences of this world-changing tidal wave of healthy seniors is now. Today. The solution is different for each of us, but here are 7 steps to immediately employ as you begin to reposition yourself for a breathtaking future:
- Get a minimum of 7-8 hours of sleep every night; the most recent research is indicating substantial benefits for achieving this goal and substantial penalties for not doing so; the Mayo Clinic points out that getting inadequate sleep induces greater risk for chronic health problems (such as appetite control, cancer, increased mortality, diabetes and heart disease)
- Get moderate exercise daily; you don’t have to train for the Olympics, just get up and move—walking is perfect; there are thousands of ideas regarding daily exercise available on the internet: the bottom line—Sitting Is The New Smoking
- Eat a reasonable diet---avoid carbs, dairy, grains, starches, processed sugar and artificial sweeteners as much as possible, along with alcohol (in excess) and of, course, tobacco; there are lots of choices, so find one that works for you and stick with it
- Supplement effectively; use your resources at Life Extension Foundation to create a powerful, effective program that may eliminate a lot of medications you’re now on (want a natural solution that may control your cholesterol to the point you can get off that dangerous statin you’re now taking?—this is the place!) and even keep you out of a nursing home permanently
- Contact us to find out about what hardly anyone else knows: the companies that are currently developing medical technologies, vis-à-vis Artificial Intelligence, that are designed to slow or eliminate the process of aging now and reverse it in the very near future
- Create a business opportunity based on something you love that will allow you to further supplement your retirement income by working at something you truly enjoy while getting paid for it; by doing this you’ll be able to let your assets continue to grow to compensate for the loss of income low-yielding deposit accounts, annuities, pensions, etc. will be providing as the government drives the U.S. economy into total devastation
- Maintain a diversified portfolio (including gold) that includes keeping a reasonable portion of your assets in a flexible instrument that allows you to stay in cash when the market’s flat, make money when the market’s going up and make serious money when the market’s going down. You must be able to produce adequate retirement income in all financial weathers—including a minimum of 10.5 % + relentlessly year after year—to ensure your core position keeps doubling every 7 years.
There you have it, a 7-step approach to jump start your new retirement goal of staying as healthy as possible for the next 15 or so years until age reversal kicks into full gear. While so many others are making the greatest mistake in the history of financial planning by continuing to convince themselves that yesterday’s solutions will solve tomorrow’s problems, you now know how to avoid it. Do so with gusto and clarity and I’ll look forward to visiting with you on an exotic beach somewhere down the road, where, as digital nomads, we’ll be running our businesses from our laptops and wondering what the poor people are doing! See you on the beach---in 2116!
Retirement Income Timer specializes in proprietary trading of the S & P 500 stock index to seek a 10.5 % per year return for conservative investors; info on any companies mentioned above provided upon request--- just use our Contact Page www.retirementincometimer.com