With all the moaning and groaning over the years about ‘You have to put money into 401K plans with your company’ or ‘You are obligated to pay into Social Security. It’s your safety net when you get older.’ ringing in your ears do you feel you future is safer in the hands of others? Are you getting more financially secure or is there something lacking? Is there another way to secure your future?
Lets look at the Social Security safety net. Frankly your retirement check is a hope. The hope is the government that has borrowed away that money you pay in every year will be solvent enough when you get to retirement age to pay you back. As a child I would have said sure the government helped my grandma and she was borderline poor but not destitute. There is some form of safety net there. As I get older and pay closer attention to those entering their retirement years this is not true anymore. Times have changed.
The hope of a check is fading fast, even the government is beginning to suggest that. This article, Will Social Security be there for your retirement? by Janet Novack in Forbes magazine is a good read to let you know where we are today.
In other words, while the money the country has supposedly been squirreling away in imaginary trust funds will have run out, the taxes coming in should still be enough to pay 75% of promised retirement benefits.
Another problem is the strength of the dollar. If the dollar is weak and inflation is rising, like it is now. Then your check even if it is a 100% the promised amount will be next to worthless. Not even able to cover your basic bills and food. The safety net is more like a safety cobweb now.
The BEST possible rate of return on Social Security is between 5.37% (for a couple with children born in 1932) to 1.2% (for a low income male born in 1976) -from Heritage Foundation- I got a headache just reading through all the mumbo-jumbo to figure out basics on this stat. Way too many loopholes and exceptions that take money away from your check to get a true feel of how much you can get back.
Government checks and entitlements rely on a strong solvent government and a strong dollar.
As for the company or your private 401K you at least have a fighting chance. You will have more control over it. That can be great if you know what you are doing in the world of finance or willing to pay someone who does.
401k’s do have some drawbacks they are reliant on certain conditions to grow the best.
IF you stay long enough with a company then you can get matching monies going into the 401K.
IF the mutual funds and stocks the 401k is invested in are strong and rise.
IF there are not the looming tax changes to take even more of your money from you.
Again the last few years of serious economic decline have changed the rules on 401Ks. First the paper you get telling you how much money you have in a 401K is showing a scary loss in money. Second companies are pulling back their matching of your monies to less amounts of money compared to workers in the early 2000′s, or they have stopped matching monies all together.
The AVERAGE return for 401k’s upon maturing is 6-9%
401k’s rely on a strong economic growth of the private economy and less governmental/tax interference.
So what can maintain it’s worth over the long haul? Commodities.
That is everything from gold, silver, precious metals, food, and supplies. Things that you can hold in your hand. These are generally considered a hedge against inflation as part of a well rounded portfolio.
I was floored when I heard this interview. Commodities rate of return is ‘Zero’??? Really?? Since when is an ounce of gold worth nothing? Here is the article you can make your own mind up as to whether or not commodities are worthless.
Long-Term Rate of Return on Commodities, ‘Zero’: Pro (as an interesting note, the day after this interview was taken the weak jobs numbers for April came in. Suddenly despite Mr Durin saying, ”People are realizing that QE3* is off the table.” QE3 is being mumbled about as a needed injection of money to sustain a weak and faltering economy.)
Frankly I am ignoring this man and carrying on with investing in commodities. Whether that be precious metals or straight out foods and materials that can be stored in my home (especially long term).
Just to prove my point check out the US Inflation Calculator. If you bought a $20 item in 1970 it would take you $118.24 for that same item today. A percentage increase of 491.2%!
The 1970′s had a huge increase in inflation. Gas shortages and food supply problems. This economy is starting to look very similar to the 1970′s. Wouldn’t it be smart to be ahead of the curve rather than being at the mercy of the store, inflation, action/or inaction of the government, Wallstreet sharks…. and on and on the list goes. Or is there another way?
Are you looking for a safety net that YOU are in charge of? Let’s open a FOOD 401K
If you have not started to fully stock your pantry then I hope this post helps solidify the urgent reasons to store food and supplies. We are going to be talking about our FOOD 401K how and what to stock up on. Urgent updates if shifts due to governments or weather are going to spike prices. Just keep your eyes out for the FOOD 401K logo to stay updated and informed!