Federal Reserve Survey of Consumer Finances

Pros, Cons and Why the SECURE Act WON’T Make Your Retirement More Secure

January 23rd, 2020 by Pamela Yellen | Leave a Comment

The SECURE Act of 2019 is supposed to help more Americans save for retirement. The new legislation will have an impact on retirement plans – and not all of them are good.

In December of 2019, Congress passed H.R.1994 – the SECURE Act of 2019 – which contains the most sweeping changes to government-controlled retirement accounts – such as 401(k)s, 403(b)s, and IRAs – in more than a decade.

The SECURE legislation – which stands for “Setting Every Community Up for Retirement Enhancement” – put into place several provisions supposedly intended to strengthen retirement security.

Not surprisingly, the financial services industry spent many millions of dollars lobbying Congress to ensure passage.

So is the new legislation in your best interests? Is the SECURE Act really likely to increase your retirement security?

Can You Answer This Critical Question About Your Retirement Plan? (Most People Can’t)

October 24th, 2019 by Pamela Yellen | Leave a Comment

Here’s the most critical question you must be able to answer about your retirement plan…

Do you know what your retirement account(s) will be worth on the day you plan to tap into them?

If you’re saving for retirement the way most people do, you couldn’t answer this question if your life depended on it!

And When You Get Right Down to it, Your Life Does Depend on it!

Here are three reasons why… [Read more…] “Can You Answer This Critical Question About Your Retirement Plan? (Most People Can’t)”

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

July 10th, 2019 by Pamela Yellen | Leave a Comment

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. [Read more…] “Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum”

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

April 15th, 2019 by Pamela Yellen | Leave a Comment

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

April 25th, 2018 by Pamela Yellen | Leave a Comment

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.”

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

March 12th, 2018 by Pamela Yellen | 2 Comments

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

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

October 23rd, 2017 by Pamela Yellen | 8 Comments

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.