• Tag Archives Retirement
  • Your Future Wealth Depends on what You Decide to Keep and Invest in Now

    Millienials look for instant gratification Spend half of their income on leisure Instant gratification doesn’t work if need to save for the future Savings rates falling, few have retirement funds Important to understand marginal difference between spending and pleasure Future wealth depends on what you decide to keep and invest in now This week the festival of all festivals begins, Glastonbury 2017. Ed Sheeran, Foo Fighters and Barry Gibb will each be singing to the 250,000 revellers who are currently on their way to Somerset. To those unfamiliar with Glastonbury it is a glorious few days in the countryside with camping and music. Every year there is far too much mud, lots of tears, alcohol, dodgy substances, hippies and great bands. Not to mention the fancy dress outfits and the toilets with questionable sanitary conditions. It is brilliant fun which everyone should try at least once.

    This post was published at Gold Core on June 21, 2017.


  • Suicide Over European Banking Crisis

    The European ‘bail-in’ rules have been cheered claiming taxpayer money will be spared. However, many seniors bought bank bonds for their retirement. In the rescue of the small Banca Popolare d’Etruria, a retiree who had lost more than 100,000 euros worth of bonds lost everything and committed suicide. There have been many such events that do not always make the press. In Italy, the death of a pensioner who also committed suicide after losing his life savings as a result of a controversial move by the government to rescue four banks. The 68-year-old hung himself at his home in Civitavecchia, a port town near Rome, after the so-called ‘save banks’ plan wiped out 100,000 in savings held at Banca Etruria, one of the four lenders included in the government rescue deal announced on November 22nd, 2015. There was the 23-year old who committed suicide over 8000 in debts for student loans. A Greek pensioner who was 77-years old committed suicide in central Athens shooting himself with a handgun just several hundred meters from the Greek parliament building in apparent despair over his financial debts.

    This post was published at Armstrong Economics on Jun 19, 2017.


  • Cab Drivers Union Says Chicago Taxi Industry Near Collapse

    In addition to repaying loans on their medallions, taxi operators also have to pay thousands of dollars each year in city expenses, like the ground transportation tax and medallion license renewal fee – expenses that rideshare drivers are not subject to. (Cab Drivers United/ Twitter)
    Ghana-born John Aikins has been a cab driver in Chicago for two decades. About 15 years ago, he decided to go into business for himself by taking out a loan with his wife to purchase a medallion – a city-issued license to operate a taxi – for $70,000. Paying it off within a few years thanks to a steady stream of passengers, they took out loan for a second medallion five years ago, using the first as collateral. Watching his medallions appreciate in value over the years, Aikins planned to eventually sell or lease them to other drivers, a common practice in the industry. ‘I hoped it would be my retirement investment, and I had planned to retire this year,’ Aikins told In These Times.
    But with the introduction of Uber and other rideshare companies to the city – which can operate without the expensive, city-issued medallions – Aikins has seen his clientele plummet over the past three years, making it increasingly hard to keep up with his medallion loan payments.

    This post was published at Zero Hedge on Jun 18, 2017.


  • GE CEO Jeff Immelt To Step Down

    In a major shakeup at one of the largest US industrial conglomerates, General Electric said Monday Jeff Immelt, 61, would step down as CEO and Chairman, a move that had been expected by many. Immelt will remain Chairman of the Board through his retirement from the company on December 31, 2017.
    John Flannery, 55, the company’s current president and CEO of GE Healthcare, will take over as companywide CEO effective August 1, concluding a 16 years period during which the stock price of GE has barely budged.
    The company said that the executive changes are result of succession plan run by GE Board since 2011. Flannery joined GE Healthcare in 2014, led turnaround, increasing organic revenue by 5%, and margins by 100 bps in 2016; began career at GE Capital in 1987.
    The company also said that CFO Jeff Bornstein has been promoted to vice chairman.

    This post was published at Zero Hedge on Jun 12, 2017.


  • How gold can rescue pensions

    The World Economic Forum, in conjunction with Mercers (the actuaries) recently estimated that the combined pension deficit currently stands at $66.9tr for eight countries, rising to $427.8tr in 2050. The eight countries are Australia, Canada, China, India, Japan, Netherlands, UK and US. Of the 2016 figure, $50.5tr is unfunded government and public employee pension promises.
    Yes, we are now talking in hundreds of trillions. Other welfare-providing states missing from the list have deficits that are additional to these estimates.i
    $66.9tr is roughly 1.5 times the GDP of the eight countries combined, and $427.8tr is nearly ten times. Furthermore, if we take out the non-productive government element, the figures relative to the private sector tax-paying base are closer to twice productive GDP today, and thirteen times greater in 2050. That 2050 deficit assumes a 5% compound annual growth rate. This is a linear projection, but the deterioration in finances for unfunded government pensions may turn out to be exponential, in line with the accelerated increase in the broad money quantity since the great financial crisis.
    The problem is mainly in the welfare states, so we know that the welfare states are in big trouble. Governments routinely offer inflation-protected pensions to state employees, funded out of current taxation. The planners in government treasury departments are coming alive to the scale of the problem, though the politicians would rather ignore it. Government finances are already being subverted by both unfunded pension obligations, and by additional rising healthcare costs for aging populations.
    Furthermore, people are living longer. Someone born in Japan ten years ago who retires at 60 can expect to live to 107, leaving the state picking up a forty-seven-year welfare and pensions bill. And it’s not much less expensive in other countries, with 50% of North American and European babies born in 2007 expected to live to 103.
    The global dependency ratio, those in work relative to those in retirement, is expected to deteriorate from 8:1 to 4:1 by 2050. When most people retire, they stop paying income tax and become a burden on the state welfare system. Therefore, retirement ages must rise. Not only must they rise, but they must rise by enough to pay for those who are otherwise fit but mentally incapacitated by dementia, Alzheimer’s and Parkinson’s, set to spend the last decades of their lives expensively kept.
    That is the background to a global problem. But we shall just say ‘poor taxpayers’, and move on. Instead, this article focuses not on the problems of funding state pensions (which is admittedly 75% of the problem), but is an overview on why the current low growth, low interest rate environment is so detrimental to private sector pensions.

    This post was published at GoldMoney on JUNE 08, 2017.


  • THE GREAT GOLD SUPPLY DISCONNECT: Market Severely Undervalues Price

    The market has no clue that it has severely undervalued the price of gold. While Central bank intervention has worked hard at capping the gold price, the ‘Great Gold Supply Disconnect’ will most certainly remedy that situation. This gold supply disconnect took place after the gold price peaked in 2011.
    That being said, the world is speeding recklessly towards an epic market catastrophe. No, this isn’t hype… I wish it was. But, unfortunately, the poor folks who continue to believe their STOCK, BOND & REAL ESTATE portfolios will provide them with a healthy retirement in the future, have no idea that their true values evaporated many years ago. However, the market just hasn’t BAKED THEM INTO THE CAKE YET…. LOL.

    This post was published at SRSrocco Report on JUNE 7, 2017.


  • The Retirement Ponzi Scheme – Mike Maloney & Steve St Angelo (Part 1/4)

    The following video was published by GoldSilver (w/ Mike Maloney) on May 30, 2017
    Mike Maloney recently spoke with his friend Steve St. Angelo (Over the next few days, we’ll be releasing parts 1-4 of this conversation directly to YouTube. They cover the coming chaos for the oil industry, the potential for our basic systems and infrastructure to fail, fundamentals of silver, when to buy precious metals, and much more. If you would like to receive an email when these new videos are released, make sure you are subscribed to this channel, and then click the ‘Notification Bell’ within the ‘Subscribe’ button.


  • Beware the Muni Bond Bubble

    Municipal Bonds are in trouble in Europe as well as the United States. The local level cannot print money, nor are they ever capable of managing their economies. The general view is when short, just raise taxes. Everything comes to an end and we are looking at the end of a Muni-Bond Bubble. The strongest possible recommendation is get out before it is too late. Sure, not every municipality or state/province is in trouble – YET! Once the muni bond bubble bursts, there will be a contagion so even the ones that are not yet insolvent will tip over.
    In the States, sell California and New England. The higher the tax rate, the deeper their debt will fall. Connecticut, for example, is hopeless as is New Jersey, New York, and just about all New England States. I was flying home from Hong Kong and upon landing in Newark, the next leg was back to Florida. I sat next to a woman from Connecticut who was going to visit her brother. She had a 1950s house 1600 square feet with taxes over $8,000 and could no longer afford to stay there for retirement. She was leaving as most people these days in what I call the Great Migration.

    This post was published at Armstrong Economics on May 30, 2017.


  • Treat Yo Self! Unfunded Government Pensions $23.2 TRILLION As Of 2015 (Global Pension Shortfall Of Nearly Half A Quadrillion Expected By 2050

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    Politicians love to promise generous retirement benefits to government employees (mostly in exchange for being elected). Benefits that they know cannot be fully honored in the long-run. The same applies to government debt – they keep borrowing knowing it is unsustainable (and then offer the childish explanation that ‘we can always print the money’ to pay government obligations). The Congressional Budget Office (CBO) projects that Federal Debt Held by the Publc (as a percentage of GDP) will grow to 150% by 2047.
    I can imagine that most elected officials in Congress are saying ‘we’ll fix the debt problem AFTER I leave Congress.’
    But the Federal debt fiasco almost pales in comparison to the public pension inferno. Not to mention California’s push towards a single-payer healthcare system that would cost $400 billion … per year (BIGGER than California’s budget).

    This post was published at Wall Street Examiner on May 30, 2017.


  • Millennials Choose To Spend Money On Travel, Dining, And Fitness Than Save For Retirement: Survey

    Millennials save more of their income than older generations. Don’t believe it? Look at a recent survey by Merrill Edge, which found millennials say they save 36% more than their general population counterparts report as over a third stash away more than 20% of their salary per year.
    As for what they’re saving for, that’s another story. Whereas baby boomers save for retirement, millennials want financial freedom and save for a desired lifestyle rather than exiting the workforce. Millennials would rather spend money on travel, dining, and fitness than save for their financial future. They are also more focused on certain milestones like landing their dream job or traveling the world, and are less worried about getting married or having kids. Bottom line, millennials are saving, just for shorter-term goals as compared to their parents.

    This post was published at Zero Hedge on May 28, 2017.


  • Really Bad Ideas, Part 2: Giving Up Without Admitting It

    Doing the right thing is hard for both individuals and their governments. Name the goal – maintaining a healthy weight, paying off high-interest credit cards, keeping debt-to-GDP at reasonable levels, whatever – and with each missed deadline or broken promise success recedes further into the distance. And the temptation grows to just give up and pretend that the goal never really mattered.
    This is happening everywhere. In the US, state and local pension plans are underfunded to the point of becoming a political (not just a long-term financial) issue. And governments, confronted with the resulting set of unpalatable options, are surrendering without admitting it. In California, for instance, the governor is proposing to fund part of its several hundred billion dollar pension liability by, believe it or not, borrowing more money:
    California Proposes $6 Billion Boost to CalPERS
    (Chief Investment Officer) – California Gov. Jerry Brown’s revised state budget proposes a $6 billion supplemental payment to The California Public Employees’ Retirement System (CalPERS), which he says will save the state $11 billion over the next two decades.

    This post was published at DollarCollapse on MAY 26, 2017.


  • Watch Live: White House Releases Details Of Trump’s 2018 Budget Proposal

    Watch as the White House officially releases its 2018 budget proposal (the statement can be read here and the full budget is found at the following link).
    ***
    The Trump administration has officially unveiled its budget seeking $1.5 trillion in non-defense discretionary cuts and $1.4 trillion in Medicaid cuts over the course of a decade, while adding nearly half a trillion dollars to defense spending, for a total of $3.6 trillion in spending cuts. The plan, titled ‘A New Foundation for American Greatness,’ would dramatically reshape federal spending, cutting anti-poverty and safety net programs, while leaving Medicare and the retirement portion of Social Security untouched.

    This post was published at Zero Hedge on May 23, 2017.


  • 22/5/17: U.S. Public Pensions System: Insolvent to the Core

    A truly worrying view of the U. S. public sector pensions deficits has been revealed in a new study by Joshua D. Raugh for Hoover Institution. Titled ‘Hidden Debt, Hidden Deficits’ (see the study opens up with a dire warning we all have been aware of for some years now (emphasis is mine): ‘Most state and local governments in the United States offer retirement benefits to their employees in the form of guaranteed pensions. To fund these promises, the governments contribute taxpayer money to public systems. Even under states’ own disclosures and optimistic assumptions about future investment returns, assets in the pension systems will be insufficient to pay for the pensions of current public employees and retirees. Taxpayer resources will eventually have to make up the difference.’
    Some details: ‘most public pension systems across the United States still calculate both their pension costs and liabilities under the assumption that their contributed assets will achieve returns of 7.5 – 8 percent per year. This practice obscures the true extent of public sector liabilities.’ In other words, public pension funds produce outright lies when it comes to the investment returns they promise to generate. This, in turn, generates delayed liabilities that are carried into the future, when realised returns come in at some 3-4 percent per annum, instead of promised 7.5-8 percent.

    This post was published at True Economics on Monday, May 22, 2017.


  • New Theory Behind Stalled Economy: Retirees Are Hoarding Too Much Cash

    For years we’ve written about the fact that Americans, young to old, are lousy savers (see “Retirement Crisis Looms As Average U. S. Household Has Saved $2,500 For Retirement“). Of course, they have to be because how else can a mature economy continue to grow unless every single person levers every asset they own to the maximum extent possible and then spends all of that money? Anything less would mean that all of Janet Yellen’s efforts have been a colossal waste. Meanwhile, this inherent inability to save is awful news for a nation that faces a massive wave of baby boomer retirements over the next 20 years.
    All that said, we were somewhat shocked to come across a report from money manager United Income which effectively argues that American retirees are saving too much money rather than too little. To summarize the thesis, United Income argues that retirees become more conservative as they grow older which causes them to save more and allocate less to equities…which is, of course, a somewhat self-serving conclusion but never mind that.
    Innovations in medicine and technology have extended human life by over 30 years since 1900. This has helped to double the amount of time the average adult now spends in retirement compared to several decades ago. But, the benefits of longer lives and retirement may be limited if older households curb their consumption or investment in preventive health measures because they are overly pessimistic about their future financial health. Overly negative viewpoints toward the future may also create self-fulfilling economic problems if it leads to an overly aggressive fixed-income portfolio. To assess these possibilities, we analyze consumer sentiment and spending data from the University of Michigan that was commissioned by the Social Security Administration and U. S. Commerce Department, among other federal agencies.

    This post was published at Zero Hedge on May 16, 2017.


  • California Admits State’s Contribution To Retirement Giant CalPERS To Double (As Recovery Takes Longer Than Expected)

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    California’s recovery from The Great Recession has taken longer that Governor Jerry Brown imagined. Yet the slowness of the recovery hasn’t stopped Governor Brown from spending like the proverbial drunk sailor on big dollar items such as high-speed rail (for which Senator Diane Feinstein’s husband was award a near-billion dollar contract). But as an economist friend of mine in California said ‘What do you expect when the Democrats have a super majority in California’s governing bodies?’ And now Governor Brown is asking President Trump for financial assistance in building the high speed train (and pay off Senator Feinstein’s husband).
    When you spend like a wild man on government projects and combating poverty, something has to give. And one of the somethings is the California state pension program for teachers and public employees. Even big spender Jerry Brown has ‘suddenly’ realized that CalPERS was only 65% funded as of June 30, 2016 (CalPERS reported that the state plans’ unfunded liability totals $59.5 billion and is 65 percent funded, meaning that CalPERS only has 65 percent of the funding required to make pension payments to state retirees).

    This post was published at Wall Street Examiner on May 16, 2017.


  • At retirement dinner, Eric Sprott praises GATA’s work

    Sprott Asset Management founder and philanthropist Eric Sprott, honored last night in Toronto at a retirement testimonial dinner sponsored by the company, praised GATA’s work and called on GATA Chairman Bill Murphy and your secretary/treasurer to stand and be recognized. Some people in the audience of about 200 actually applauded, through the audience consisted mainly of ordinarily respectable people from the Canadian financial industry. Of course they may have just been trying to be polite and to humor Sprott. But some later confessed to following GATA’s work and to have been persuaded by it.
    Sprott went on mischievously to contrast what he called “the GATA table,” at which Murphy and your secretary/treasurer were seated with Sprott Asset Management’s John Embry and economist Ian Gordon of Longwave Group, with what he called “the World Gold Council table,” at which two former chairmen of the council were seated: Franco-Nevada founder Pierre Lassonde and Goldcorp Chairman Ian Telfer. Sprott noted that during the dinner no rolls had been thrown from the GATA table toward the World Gold Council table.
    Civility and cordiality were maintained though Lassonde repeatedly has dismissed complaints of gold market manipulation and has insisted that central banks couldn’t care less about gold while GATA has dismissed the World Gold Council as an accomplice with central banks in gold price suppression, a facilitator of “paper gold” and the shorting of the monetary metal.

    This post was published at GATA


  • New Study Issues ‘Code Red’ on Canadian Housing Affordability

    Shelter prices are so over-valued relative to income levels today, that saving just a 10% downpayment now takes 12 years on average, compared with just 5 years to save a 20% deposit twenty years ago. In many cases, people are trying to circumvent the waiting and saving period by borrowing even the downpayments. Whatever the approach, inflated shelter costs are keeping people from being able to meaningfully save for other critical necessities like education and retirement, and this is leaving the society increasingly vulnerable.
    It now takes about 7.5 years to save up for a down payment on a house in Toronto. In Vancouver, that number is over 10.5 years.
    The data comes from the National Bank of Canada, which calculated how much it would take a median-income earner in several cities across Canada to save up enough for the minimum down payment on a median-priced home assuming they saved 10 per cent of their income.

    This post was published at FinancialSense on 05/10/2017.


  • Retail Meltdown Demolishes Mall Investors

    Even the biggest.
    The closure of thousands of retail chain stores last year and this year, with many more to come – from big anchor tenants such as Macy’s to smaller stores such as Payless Shoes – and the bankruptcies and debt restructurings ricocheting through the industry are having an impact on retail malls. And mall investors – that may include your retirement account – are getting crushed.
    The commercial real estate industry has been claiming that these shuttered retail spaces are being converted into restaurants or fitness centers or smaller shops or whatever. And zombie malls are leasing out their parking lots to car dealers to store their excess new vehicle inventory, and that everything is going to be fine.
    But investors in publicly traded Real Estate Investment Trusts that were for years among the stars in the S&P 500 are voting with their feet.
    It’s not that these REITs are doing all that badly on an operational basis. They’re hanging in there. But many of the announced store closings and bankruptcies haven’t worked their way through the pipeline.
    Shares of these REITs all peaked together at the very end of July 2016 and have since then plunged in unison.

    This post was published at Wolf Street on May 9, 2017.


  • Sympathy For The Devil?

    In our recent report, Banks Are Evil, we pulled no punches in making the accusation that the financial system is the root cause of injustice in today’s society.
    It’s a good blood-boiler. You should read it if you haven’t already.
    Its main premise is this:
    In my opinion, it’s long past time we be brutally honest about the banks. Their influence and reach has metastasized to the point where we now live under a captive system. From our retirement accounts, to our homes, to the laws we live under — the banks control it all. And they run the system for their benefit, not ours.
    While the banks spent much of the past century consolidating their power, the repeal of the Glass-Steagall Act in 1999 emboldened them to accelerate their efforts. Since then, the key trends in the financial industry have been to dismantle regulation and defang those responsible for enforcing it, to manipulate market prices (an ambition tremendously helped by the rise of high-frequency trading algorithms), and to push downside risk onto “muppets” and taxpayers.
    Oh, and of course, this hasn’t hurt either: having the ability to print up trillions in thin-air money and then get first-at-the-trough access to it. Don’t forget, the Federal Reserve is made up of and run by — drum roll, please — the banks.

    This post was published at GoldSeek on 7 May 2017.


  • Dennis Gartman: “We Suffered Our Worst Days Of The Year These Past Two Days”

    From Dennis Gartman’s latest letter to clients, presented without comment.
    We want very badly to believe that the great bull market that has been extant for as long as it has been… now having finished eight powerful years to the upside here in the US… continues in unabated fashion for the simple truth of the matter is that everyone, everywhere lives better in bull markets. The food tastes better; the music is clearer with sweeter melodies; the women are lovelier and the men are actually handsome. Cinderella lives in bull markets. In bear markets, suddenly the make-up runs; the dresses turn shabby; the bands play off-key and without rhythm and the men and women turn one upon the other. Life turns harshly for the worse. Thus we want truly to believe that the bull market continues but we are beginning to have real doubts. Certainly a correction of some very real magnitude is upon us.
    * * *
    We suffered our worst days of the year these past two days in our retirement fund here at TGL, losing nearly 3% this week and in the process we cut back our positions dramatically and in violent, swift fashion. We cut back our steel position entirely; we cut back our positions in closed end bond funds entirely; we cut back our position in grains entirely, leaving us only with a position in the US’ largest ball bearing manufacturer (which we had threatened to buy on a correction and which we did yesterday) and with our positions in gold predicated in EURs and Yen.
    We know only this: that when things go awry it is best to cut positions as swiftly as one might. As Jesse Livermore was told by a more senior mentor about a position that he… Livermore… had had in place that was causing him to lose sleep, cut back to a ‘sleeping’ position. We have done that, and even now we find it difficult to doze off for the pain of losing 3% in one week is very real and all too evident.

    This post was published at Zero Hedge on May 5, 2017.