The Four Horsemen of the Retirement Apocalypse
There are almost 76 million baby boomers alive today, 28% of the US population. Since 2011, an estimated 10,000 boomers have been retiring daily, and that trend will continue for another 10 years. They represent the largest retirement contingent in US history, placing strains on Social Security and Medicare.
The US government deficit will increase nearly every year over the next decade and rise to the highest average level in the last 50 years. Growth in federal revenues will be outpaced by spending, particularly for Social Security, Medicare and interest payments on government debt. An approaching fiscal crisis or retirement crisis, the baby boomer retirement wave is the US’s biggest and most predictable train wreck.
Boomers are less fortunate than their parents’ generation. Most defined benefit pension plans have been replaced by defined contribution plans that offer no set guarantees in salary replacement. Boomers will be more dependent on their own savings and Social Security. Unfortunately, boomers’ savings fall short of meeting retirement expectations. Boomer satisfaction, confidence and retirement preparedness have fallen steadily since 2011 despite positive equity returns, low market volatility and improving consumer sentiment.
Puplava discusses the four horsemen of the retirement apocalypse: longevity; medical costs; financial repression; and inflation.
“If you plan to avoid the four horsemen, have a plan, plan early and start today. It is the first day of the rest of your life. Begin now!”