Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum

The typical 65-year-old has only enough savings to cover 9.7 years of retirement income. That leaves the average American man with a gap of 8.3 years, and women (who live longer) face a 10.9-year gap with no savings left.

That’s according to a scary new study by the World Economic Forum. This assumes you live an average lifespan. If you’re one of the “lucky” ones who lives longer, you could outlive your money by 20 to 25 years or more.

6 Challenges You Face that Could Turn Your Retirement Dreams into a Retirement Nightmare…

How many of these challenges have you prepared for?

Challenge #1: The typical household nearing retirement has an average of only $135,000 in their combined retirement accounts – enough to provide at most $600 per month income. (Source: Federal Reserve Survey of Consumer Finances)

Challenge #2: Even healthy couples will face extreme health care costs in retirement.

A healthy 65-year-old couple retiring now will spend an inflation-adjusted $551,000 on out-of-pocket medical costs not covered by Medicare. (Source: Milliman Health Cost Guidelines)

This is significantly more money than many pre-retirees have saved. If you live longer than average or have some health problems, your costs could be much higher.

Challenge #3: You’ll owe the IRS 25-50% of your savings when you take income from a tax-deferred account, such as a 401(k), IRA, 403(b), etc.

Most people look at their retirement plan balances and think it’s all theirs. They tend to forget they’ll owe the IRS taxes on every penny they’ve put in and every penny of growth.

And if tax rates go up – which is highly likely due to our country’s exploding debt and aging demographics – you’ll need to be prepared for an even higher tax bill.

Challenge #4: If you’re counting on Social Security to help close the gap, keep in mind that Social Security benefits have lost 1/3 of their buying power since 2000, as many of the things retirees typically purchase have increased several times faster than Social Security cost-of-living adjustments.

Challenge #5: The typical investor in equity mutual funds has earned only 3.88% annually for the past 20 years – beating inflation by a meager 1.7% per year.

Asset allocation and other types of investors actually lost ground over the last two decades when factoring in inflation. (Source: Dalbar 2019 Quantitative Analysis of Investor Behavior)

Challenge #6: If you’re planning on following the once-recommended “4% rule,” which said retirees could take 4% out of their retirement accounts each year, then you have a 50% probability of running out of money over 30 years.

The current recommended annual withdrawal rate is just 2.8%. If you have a $500,000 nest-egg, that would give you just $1,166 per month. If you have $200,000 saved, you could withdraw $467 per month. And with $1 million saved, that’s $2,333 a month.

When you hit retirement, what kind of lifestyle do you think that will provide you?

What more proof do we need that conventional investing and retirement planning strategies aren’t working?

Isn’t continuing to do the same thing with an expectation of different results the classic definition of insanity?

When you Bank On Yourself instead of banking on Wall Street, the government, or your employer to provide for your retirement security, you get these benefits and more…

  • Guaranteed, predictable, competitive growth every year
  • Both your principal and growth are locked in – even when the market crashes – so you never go backwards
  • You have access to your money with no restrictions or penalties – no questions asked
  • You get tax-deferred growth and can take a retirement income with no taxes due, under current tax law
  • Your savings are protected by a multi-layer safety net with a 160-year-plus track record
  • Because the growth in these plans is exponential and your premium is guaranteed never to increase, you enjoy some built-in protection against inflation

Find Out Today How the Bank On Yourself Safe Wealth-Building Strategy Can Help Give You Financial Peace of Mind

It’s easy to find out what your guaranteed, bottom-line results could be if you added Bank On Yourself to your financial plan.

Just request your free Analysis here now.

The biggest regret most people say they have about the Bank On Yourself strategy is that they didn’t get started sooner. Don’t let your inaction turn your retirement dreams into retirement nightmares.

Take the next step towards economic sanity today by clicking this button:

Many Stock Market Investors Haven’t Kept Up With Inflation Over the Last 20 Years – DALBAR 2019 Report

What kind of return would you have to get in the stock market to make it worth the risk and gut-wrenching ups and downs?

Would you put your life’s savings at risk for a 5% annual return?

Or would you require at least a 7% return?

Or maybe even a 10% annual return?

If you’re like most people we’ve surveyed, you wouldn’t do it unless you thought you could get at least a 7% annual return over time, right?

Here’s the Harsh Reality of the Actual Returns Investors Are Getting…

I hope you’re sitting down because this is going to floor you: According to a new study, the typical investor in equity mutual funds has gotten only a 3.88% annual return… over the last 20 years!

But it’s actually much worse than that. Here’s why… [Read more…] “Many Stock Market Investors Haven’t Kept Up With Inflation Over the Last 20 Years – DALBAR 2019 Report”

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.”

[Read more…] “The Financial Shock that Can KILL You”

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

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

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

[Read more…] “Federal Reserve Survey: Your 401(k) and IRA Won't Give You a Decent Retirement”