You learned how to make money, only to have it taken from under your nose by inflation !? What can you do about it? There is a solution.
I've lived in countries where inflation was taken seriously when it got over 10% per month. Yes, per month – not per decade. We've been spoiled in America thinking that 1% per year is a disaster. Maybe not spoiled, just lolled into a false sense of security. We think, "1% is not that bad". But, did you realize that inflation compounds year on year? That means 1% times 1% times 1% grows very quickly and grows into a monster much bigger than 1%. You think it makes no difference? I'm not going to bore you with math, but a couple of decades can destroy your hard-earned savings. You knew that, did not you?
How about a lifetime building up a retirement plan? Over a lifetime, you can go from cars that used to cost a few hundred dollars to tens of thousands. The cars have not gotten a thousand times better – it's the purchasing power of the dollar that has tanked. I'm not here to ruin your day, just warn you that your dream of a safe, secure, comfortable retirement may be just that – a dream. The dream may become a nightmare if your monthly fixed retirement income can not keep pace with the cost of living. Why are there so many bent-over seniors toiling in the supermarkets? It is very, very sad to see this.
Between home, work, and jobs, where would you rather spend your retirement years?
The purpose of this article is not to alarm, but point out that serious action is required to avoid a disaster during your twilight years. Why would it be that we all think we'll never grow old and never die? I can guarantee that we all will die, at a young or old age – it will happen. What if you retire and live on for another forty years?
Infection means you may buy groceries with your retirement today, but go hungry ten or twenty years down the road!
That was the somber news – now for the really bad news.
Our nation is entering into the worst recession in our lifetimes. The employment situation is going to get worse before it gets better – and that may take many years. Did it happen to you that the people who contribute to retirement funds are the people who are working? Pause for thought – fewer and fewer people are working. More and more people are reaching retirement age and living longer. You do not need a math degree to see that, as a nation, we're in trouble. How about higher taxation to make up the difference? Do not think so – though, it can not be totally ruled out.
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