GM : "Retirement can no longer be counted on"

some_math_guy · Tar Sands Joined: Feb 01, 2006 Posts: 58

My wife and I have been agonizing over this for months...she works for the government and expects to receieve a gov't pension when she retires (like most govn't employees here in Canada). I work for the university and have the option of withdrawing my actual retirement funds at any time(subject to a nasty 37% tax penalty). I'm in my late 20's, and when I think about what the world will probably be like 40 years from now when i retire, I can't imagine a scenerio where hundreds of millions of people still get their 5-10% return on investment to fund their retirement lifestyles (boats, vacations, golf, etc).

Pension funds are generally managed by a team of financial analysts who work to generate a 5-10% return on the monthly contributions of all of the pension fund members. When the real energy crunch hits and starts to seriously impact the costs of doing business, as Richard Heinberg has said the result will be less economic activity. Is there any possible way to get around this? It follows that with reduced economic activity, companies will be less profitable, there will be greater losses and more bankruptcies, and probably a general devaluation of stocks and investments from today's standards.

Given this likely scenario, how on earth can we expect our investments to make 5-10% on average for 40 years? Unless you pick just the right ones that are going to do reasonably well post-peak, most people I imagine are going to see their investments lose money, not make money.

For these reasons I am starting to believe that all of my money that was earmarked for long-term savings (ie. retirement) should instead be used to purchase things of long-term value *now*...ie. mortgage-free land, renewable energy hardware like PV, microhydro, wood stove, superinsulating your house, solar domestic hot water, etc. A pension is really nothing but a promise that someone will pay you money at some point in the future, and as all the Enron shareholders discovered, a promise sometimes isn't worth much. Is it worth betting 40 years of your savings on a promise? Or would you rather have some solar panels mounted in your backyard or gold in a safe in your house?

Another point I'd like to make is about gold and silver...I doubt that gold and silver will make great investments for the near to medium-term future even though they have given decent returns recently. I see PM primarily as a way to preserve your savings in a form that cannot be debased. If the value of gold/silver drops considerably in the future, you will be in trouble, but I also see the stock market devaluing significantly within the next 20 years (50%?).

Anyways what I wanted to point out is that I believe that the baby boomers who retired within the last 10 years are the last generation that will ever experience 'retirement for the masses'. If you want to work out a plan for your own retirement, for sure do so, but don't expect any combination of government or private industry pension plans or stock-based RRSP's to take you through to retirement and beyond.

Comments?

thor · Heavy Crude Joined: Jun 21, 2005 Posts: 453

Retirement is the most ludicrous construct ever invented. The money you put aside during your "career" covers your lazy ass for a year or two, tops. The following years of retirement are nothing else then paper money recklessy injected into the economy. It's criminal if you ask me.

Nope, boys and girls, we all need to work for food and shelter. The best retirement you can ever imagine is truly owning a house and a garden for your food. That's it, no mortgage bullshit and stock market pyramid schemes.

Oh boy, I'm such a doomer. Sad

Revi · Fusion Joined: Apr 25, 2005 Posts: 3538 Location: Maine