There is a pending retirement crisis for U.S. workers, and the only solution is to take your future into your own hands.
So today, let’s talk about a strategy to ensure your retirement years will be as you hope and dream.
I receive a daily email from a business and tech news service called The Hustle. While the emails tend to be focused on trends in technology, last week, the lead covered some uncomfortable news about retirement planning. Here is what the email said:
A 2018 study found over half of American adults think about retirement at least four times per week.
In 2022, we’ll take the over on that number.
Due to several factors, America is in the midst of a looming retirement crisis, per Bloomberg.
For decades, Americans have relied on an increasingly unsteady “three-legged stool of retirement,” consisting of:
- Pensions, AKA “defined-benefit plans,” which are steadily being replaced by more cost-effective defined-contribution plans funded and managed by workers.
- Social Security, which was introduced in the 1930s to protect Americans in their later years — but the fund’s reserves are on pace to dry up by 2035.
- Personal savings, which are down across the board. Only half of private-sector workers have an employer-sponsored retirement plan, and those who do lost a collective ~$3.4T in the first half of 2022.
For those that do have enough to retire, rising inflation means they may not live as comfortably as expected.
I see some critical takeaways from this information.
First, many Americans are worried about retirement, and rightfully so. Two stock market crashes in the last three years illustrate that you cannot count on stock market gains to fund a secure retirement. Also, the fact that people think about retirement that much tells me they don’t have a plan. Stressing and worrying without a plan leads to more stress and worry.
Second, if you want to have a comfortable retirement, you need to have control of as much of your retirement savings as possible. You cannot count on an employer pension or Social Security. You can’t count on suddenly, at age 65, having enough assets to provide an attractive income.
Here are a couple of things you can do right now:
- Defer as much of your income as possible into your employer’s 401k or 403b plan. Make sure you max out any matching funds.
- Research the investment options inside of your plan. Going with the usual index or life stage funds may not give the returns you need to have the money you want at retirement age.
- If you can, go with self-directed investments inside of your 401k plan. Follow an income-focused approach such as my Dividend Hunter service.
- Start or add to additional retirement savings outside of your employer-sponsored plan. You should at least put the yearly max into an IRA or Roth IRA each year.
Finally, let’s talk about having a retirement savings plan that will work and not depend on the ebb and flow of stock market values.
With my Dividend Hunter and Monthly Dividend Multiplier services, I show members how to focus on building an income stream. Cash income can be counted on to grow and eventually be your retirement income. With my systems, which involves reinvesting dividends from high-yield investments plus making regular additional investments to accumulate retirement assets, you can grow your income by 20% to 40% per year.
My retirement savings, which follow my own recommendations, has the income growing at the high end of that range. Consider these factors:
- You can have your income growing no matter what happens in the stock market. In fact, when the market is down, you buy high-yield stocks “on sale” and increase your income even faster.
- Your income will grow quarter after quarter and year after year. Think about that—an income stream that grows constantly and is not tied to stock market prices.
- You can make your income grow faster than you might expect. With the growth rates I highlighted earlier, your income will double every two to three years. Being conservative, if you have $10,000 of investment income now, in three years, it will be $20,000, in six years $40,000, and in nine years, $80,000.
- Even if you have just a decade until you plan to retire, you can have the confidence to build a retirement income you can count on—no guessing, no worrying, no fears that the stock market will crash.
I am very focused on providing information to the members of my services to help them manage their investments with the goal of a secure and comfortable retirement. To see how to get that information in your inbox, click here.