The Festering Social Rift over Pensions
The comments below are an edited and abridged synopsis of an article by Adam Taggart
Most Americans will never be able to afford to retire; Taggart laid out the depressing math in a recent report called “A Primer on Investing for Inflation-Adjusting Income.”
There are a number of causal factors that have contributed to this lack of retirement preparedness (decades of stagnant real wages, fast-rising cost of living, the Great Recession, etc.), but perhaps none has had more impact than the shift from dedicated-contribution pension plans to voluntary private savings.
There’s no fix to the retirement predicament of the US workforce. There’s no policy change that can be made at this late date to reverse the decades of over-spending, over-indebtedness, and lack of saving.
But the US can influence how they take their licks: Leave the masses of unprepared workers to their sad
Time will tell. But there will be tougher times ahead, especially for those with poor income prospects.
The smart strategy for the prudent investor is to prioritize building a portfolio of income streams in order to have sufficient dependable income for a sustainable retirement, or for simply remaining afloat financially.
Sadly, accustomed to the speculative approach marketed for so long by the financial industry, most investors are woefully under-educated in how to build a diversified portfolio of passive income streams (inflation-adjusted and tax-deferred whenever possible) over time.
Those looking to get up to speed can read Taggart’s report, and make sure the wealth they have accumulated doesn’t disappear along with the bursting of the Everything Bubble.
