The Global Pension Nightmare – Global pension underfunding will be $400 trillion by 2050.
Apparently good things do come to an end. The global pension outlook is looking bad and a large part of this stems from people living longer and simply not saving enough while they work. There are some major problems on how pensions are structured and the US, the wealthiest nation in the world is shifting to a “work until you die†retirement plan. And this is for the richest nation so you can imagine how things look in other countries. Most people continue to ignore these massive problems but it is hard to miss the fact that by 2050 global pension funds will be underfunded by $400 trillion. Does this sound sustainable?
Student loan tsunami on the horizon:Â Of $847 billion in Direct Loan program, only $535 billion is actually being paid back at the moment.Â
The amount of student debt continues to grow like a skyscraper reaching for the clouds. There seems to be an unlimited amount of student debt that college students are willing to take. As of today, there is $1.44 trillion in student debt outstanding. But how much of this is being actively serviced? After all, if you take out a mortgage or auto loan you start paying on it right off the bat. You will be surprised at the small amount of student debt that is actually being paid back at the moment. Young Americans that are already cash strapped are going to get even more budget tightening once they graduate and need to pay back the large amounts of loans they have taken on.
How to live on $25,000 a year in low wage America:Â A guide to living on the per capita income.
Most Americans live paycheck to paycheck. We hear stories of people waiting until midnight at the end of the month so accounts can get filled with funds simply to buy food. This shouldn’t come as a shock given the per capita income of a working American is roughly $25,000. Does that seem like a lot or a little? Well we are going to find out in this article when we actually look at a full monthly budget at this level. Most Americans don’t have money saved for retirement because most of the living expenses are already eaten up by simply being alive.
The new retirement model revolves around dying broke and realizing that the 401k model of investing is a sham for most Americans.
The new retirement model means working until you die. Most Americans are broke and living paycheck to paycheck. Yet the stock market is near a modern day peak. What is going on? Wasn’t the 401k experiment that launched in the early 1980s to replace pensions supposed to be a panacea in terms of building out nest eggs for the masses in their golden years? That was the idea but unfortunately inflation has eaten away at the standard of living and many Americans simply did not have enough to save when it came to retirement. We know the drill – sock away X percent a month and after 30 or 40 years you will have seven figures. Well here we are, nearly 40 years from that experiment and most Americans have little to nothing in their retirement accounts and the pension (a forced 401k in a way) is virtually extinct. So is dying broke the new retirement model?