The Decline and Fall of the Retirement Empire
Irene A. Majchrzak
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Article Title:
The Decline and Fall of the Retirement Empire
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Article Description:
"I have a pension and it'll have to be enough!" As a
financial Advisor over the past 10 years I have often heard
this statement. It was difficult 10 years ago to explain to
future retirees why this was an impossible belief to hold.
10 years ago no one would believe the changes that would
occur in our world view.
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Distribution Date and Time: 2010-03-10 10:45:00
Written By: Irene A. Majchrzak
Copyright: 2010
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The Decline and Fall of the Retirement Empire
Copyright (c) 2010 Irene A. Majchrzak
Debt Free To Retire
http://debtfreetoretire.com/
"I have a pension and it'll have to be enough!" As a financial
Advisor over the past 10 years I have often heard this statement.
It was difficult 10 years ago to explain to future retirees why
this was an impossible belief to hold. 10 years ago no one would
believe the changes that would occur in our world view. Then, the
economy ebbed and flowed, Bear and Bull markets were manageable.
People just waited out the economic downturns. They didn't sell
their stock, they held and kept all of their investments, many of
which they themselves had purchased from their own jobs or were
given to them as gifts from their parents.
Here we are 10 years later looking back at our retirement
planning and the fallout effected by the stock market conditions
of March of 2000, that changed the way we invested forever. We
sold stocks, we no longer held and kept them for our lifetime. We
realized the astute ideas behind exit strategies for selling
stock, utilizing stop/loss strategies to protect the profits of
our investments and questioned wisely, the usefulness of selling
short or on margin.
Preparing for retirement 10 years ago the employee was often
provided a future pension through his employer. This pension may
have been provided strictly by the company profits at a time when
business growth could be projected year by year. Or the pension
may have included employee participation in the still fledgling
pre-tax contributions to 401(k)'s offered by corporations to
help the workingman provide for his own retirement.
Many people participated in the former pension because their
employers provided the funding. Less took advantage of the latter
opportunities because they either did not feel they could afford
to contribute to the investment or they felt that the pension
and/or Social Security benefits offered by the Federal Government
would be enough to cover the lifestyle of their retirement
future.
Either way it was certain that the employee had very little
comprehension of the value of the pre-tax savings and the impact
upon their future retirement lifestyle. Employers were also
shortsighted looking only at the relief from having to provide an
employee pension, not necessarily invested enough into the
practice to assure the employee would take advantage of the
benefit; and certainly not interested enough to assure the
employees had options that would give them really good mutual
fund choices and diversification into more than just bond funds
or large cap growth funds.
Little did we realize that the pension would go away and that the
pre-tax function for saving for retirement would be the mainstay
of millions of Americans. A better understanding of how the
401(k) grows in relation to tax-deferred income, reducing income
taxes and building a nest egg based on lifestyle needs, has
improved the employees ability to recognize the importance of
saving for their own retirement.
Now we need to protect our affluence. We need to keep watch over
the economic impacts that will upset the continued prosperity and
remain aware of the political moves that will affect the stock
market. This is often difficult because of the hidden agendas of
the political parties.
Some people believe that what is happening to our wealth through
loss of pensions, diminishing Social Security for future
generations, our current 401(k) investments and the governmental
determination to spread the wealth around through taxation and
distribution is considered part of the cycle of change which will
somehow better the economic situation for all Americans.
Recognizing that to hold this belief means that people feel they
can still control the costs and expenses of retirement by simply
tightening their belts and foregoing the dreams of travel and
hobbies almost inherent to the retiree. What a surprise to find
they are now subsisting in a lifestyle that is denuded of the
anticipation of living a better retirement life than the previous
generation. The need to try to control your retirement economy
begins with you, your saving, your spending habits and your debt.
These are things you can control to give you the life you can
expect as a retiree.
Market Gurus kept anticipating the return of the market after
March of 2000. On September 11th terrorism began the decimation
of our economy, societal changes from an industrial nation to a
service industry as corporations outsourced more and more of our
jobs overseas added to the job losses, and the economic impact of
stock market underhanded graft and large investor control caused
a continuing financial drag on our lives and prolonged the
healthy return of our savings and our standard of living.
When I questioned myself as to how the economy would ever make a
return to "normal" with increasing job losses in every sector
and increasing unemployment and government takeovers by
"stimulus packages," I began reading and researching. A few
months later reading about the devastating impact of the American
Civil War on the economy of the United States, I found the answer
to the turn of the century wealth that brought our country back
to prosperity after the Civil War and found that it was pretty
much based on the Industrial Revolution and all of the industries
that evolved so quickly because of it.
Today, we are a service-providing nation. We used to provide
services all over the world and while we still do, as a Nation
the services are provided through American Corporations by
cheaper labor in outsourced countries that have raised their
standard of living while ours has dwindled. Is all of the planned
Socialization of America blamed on government policies and
political issues designed to change voting habits, or on the
cycle of change that will inherently make the United States of
America a better place to live?
What I see is a return to a life with fewer opportunities for
this generation to become more affluent than their parents
through hard work, education and vision because of huge
government spending and now even less interest in building new
job opportunities. Our future will hold very little opportunity
to travel domestically or to foreign lands because of the
inability to afford the luxury of gas for your automobile or the
exorbitant costs of flying and train travel. Staying home within
a provincial, small town atmosphere will deny us knowledge of a
better life beyond the borders and where soon you will, again, be
controlled and told what to think, what to do, how to work, where
to live, and expect nothing more from life reminiscent of the
earlier era's when there was no middle class only upper and very
low classes. History does indeed repeat itself, but I thought we
were to learn our lessons.
Is it only for the conservatives and independents to learn the
lessons while the liberals consider how they can make slaves of
the lower class through socialism and demagoguery? Jobs have
always been available in health care but today it is not in the
higher echelon of Degree level Nurses but in the lower stratum of
home care aides; not in the High tech industry of computer
designs but designs developed by computers. While our government
provided opportunities for jobs, now they own and compete for
jobs against the entrepreneur, becoming the largest employer this
country has ever had. Who will break up "Ma Bell" today?
Some people might say "Get over it! You have had a great life in
middle class America, it's time now for the lower classes to
move into your world." I'm afraid the only way this will happen
is if we descend to the level of the lower classes through a loss
of our retirement savings and the increase in taxes causing the
demise of the middle class. Now there will only be two classes
and history has repeated itself. I should have titled my article
...The Rise and Fall of the Third Reich... I mean Third Class...
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Irene A. Majchrzak helps people retire debt-free with a sense
of well-being and the freedom to have the things they want.
Get her free ebook, Debt Free to Retire, by going to
http://debtfreetoretire.com/
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