The Financial Shock that Can KILL You

Middle-aged Americans who experience a major economic blow are more likely to die during the years that follow than those who don’t.

That’s according to a new study published in the Journal of the American Medical Association.

Shockingly, those who experienced a devastating financial loss – called a “wealth shock” – have a 50% greater risk of dying early. And it doesn’t matter how much money you had to start.

How likely are you to experience a wealth shock?

About 1 in 4 people in the study have had a wealth shock, averaging a loss of about $100,000. Often it was a result of a drop in the value of retirement investments or a home foreclosure.

Some shocks happened during the Great Recession of 2007-2009. Some happened before or after that.

But it didn’t matter if the economy was good or bad – a wealth shock still increased the chance of dying early.

The findings suggest a wealth shock is as dangerous as a new diagnosis of heart disease, says Dr. Alan Garber of Harvard University. Another expert noted that,

We should be doing everything we can to prevent people from experiencing wealth shocks.”

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Why is the “Father of the 401(k)” Now Putting His Money into a Bank On Yourself-Type Plan Instead?

It caused quite a stir when the man who is credited with being the “father of the 401(k),” Ted Benna, recently announced that he’s put a substantial part of his own money – “probably the biggest part of my wealth” – into what is most commonly known as a Bank On Yourself plan.

You see, for at least six years now, Benna has been calling the 401(k) a “monster” that “should be blown up.”

Benna is credited with finding a way to capitalize on the tax code to create a way for working men and women to supplement the pension plans that many workers used to have. Those pensions plans have been disappearing, and 401(k)s were created to hopefully help pick up the slack.

But over the years, Benna watched Wall Street and Big Business pervert the 401(k) in ways he couldn’t possibly predict.

In a recent interview, Ted Benna discussed three reasons why we should be very leery of 401(k)s and IRAs:

  • The government may repeal the 401(k) and IRA, so you won’t be able to put any more money pre-tax into these accounts, or the amount you can put in will be drastically reduced (Congress considered doing that again last year!)
  • Benna believes the next stock and bond market crash is imminent and could wipe out 40% of the typical portfolio
  • Wall Street has hijacked these plans, and the excessive fees charged by mutual fund companies and plan administrators are robbing you of up to half of your nest egg

I’ve Been Sounding the Alarm About 401(k)s and IRAs for Even Longer than Benna

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Federal Reserve Survey: Your 401(k) and IRA Won't Give You a Decent Retirement

If you’re counting on your 401(k) or IRA for retirement income, I have some bad news for you…

A new analysis of the Federal Reserve’s latest Survey of Consumer Finances by the Center for Retirement Research demonstrates that 401(k) plans are destined to fail millions of Americans.

The Federal Reserve survey is updated every three years, and the latest one reveals that, in spite of the long-running bull market and an improving economy … the typical couple nearing retirement will only receive $600 per month from their 401(k)s and IRAs combined.

That $600 a month is not indexed for inflation, so its purchasing power will decline over time.

And that $600 a month is likely to be the only source of income people will have to supplement Social Security because the typical household has virtually no other savings outside of its 401(k) and IRAs.

The Retirement Savings Shortfall News is Even Worse for Younger Workers with 401(k)s

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