Retiring in a global recession is not going to be easy

By: Curtis Wayne 1 Comments   1/19/2016

As oil prices head towards $20, the world banks are moving toward bankruptcy.

At the same time, the baby-boomers are headed for retirement.  As many as ten thousand per day will be retiring for the next 10-15 years.

Governments have promised a truckload of entitlements on the backs of artificial and unsustainable economic growth that is not happening.  And Central Banks have printed so much money that inflation is going to steal the wealth of what little savings are left.

Vern Gowdie, at the Daily Reckoning explains the dilemma,

“We have a serious demographic showdown coming our way within the next decade.

In one corner we have the Boomers. They have expectations of still living a lifestyle just slightly above their means (financed from investment income, capital drawdowns, reverse mortgages, age pensions and access to low cost healthcare).

And in the other corner are Gen X, Gen Y and the Millennials. They’re none too happy with the debt and entitlement legacy left by the Boomers. A legacy which is leaving them with being taxed higher for longer.”

“Research Affiliates calculates that between 2018 and 2030 the retirement age will need to rise to over 70.”

“Pressure is going to mount in the coming years as both sides of the demographic divide clash out of self-interest.”

“Low economic growth feeds into low investment returns. Low investment returns means a lot of retirees are going to find their capital base is not sufficient to generate a standalone retirement income.”

Put another way, the bubbles created by Central Banks around the world are going to crash, and when they do, they are not going to bounce back like they did in 2009-2015.  This time markets are going to collapse and stay down like they did in Japan in the 90's. 

It will be more difficult to make money in the usual investment instruments like Stocks, Bonds and Real Estate in the next 20 years.  Mutual funds are not going to work.  Gone are the days of just picking a mutual fund from your companies small selection of 401k options and watching it climb. 

It is going to take a lot more knowledge to make good investments after the crash. 

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Reader Comments

Bill Says: on Sunday, March 10, 2019 9:19:50 AM

What are you talking about, the market is sky high. This is a great time to retire. Most of my friends have large houses and pensions to retire on.

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