Why You May Retire in Poverty

We already know the statistics....the average 50 year old in America has less than $10,000 put away to care for themselves in retirement.  But when you ask these folks when they plan on retiring, most of them will still tell you they are planning on 65.  If you go further and ask how that could be, they will shrug and say, "Well, by then I'll have Social Security and Medicare....so...."

Can you see a massive train wreck coming??

Today's seniors are more affluent than the general population. But the generations that follow them - starting with the baby boom generation - will not be as fortunate. The decline of pensions, the erosion of Social Security and the housing crash all are pointing toward a new crisis of poverty among lower- and middle-class seniors in the years ahead.

Social Security and pensions, in particular, have been the two most important factors in keeping seniors out of poverty for decades. Both provide reliable, guaranteed income sources for life. And home equity has been an important fall-back source of assets that can be tapped in retirement. That is because seniors typically have more equity built up in their homes than younger homeowners and carry less debt into retirement.

Indeed, the poverty rate for seniors in 2010 (the most recent year available) was just 9 percent, compared with 15 percent for the general U.S. population.

But the economic safety net is fraying quickly.

As recently as 1998, 52 percent of Americans over age 60 received income from a defined benefit pension, according to a new study by the National Institute on Retirement Security (NIRS). By 2010, that figure had fallen to 43 percent. In the private sector, the decline has been more dramatic - down from 38 percent in 1979 to 15 percent in 2010.

The erosion is continuing, with automotive giants General Motors Co and Ford Motor Co announcing plans to terminate pension plans for hundreds of thousands of retirees, and public sector plans facing financial pressure to increase funding levels and curtail benefits.

Here;  http://www.reuters.com/article/2012/08/07/us-column-miller-poverty-idUSBRE8760VW20120807?envprodusx=0

Yes friends, the economic safety net IS fraying quickly.  When SS was put on the books it was NEVER meant to be a living pension...it was supposed to buy you a few years worth of soup so you could die with some broth in your stomach.  And even after the program was expanded it was originally sold as just one leg of a three-legged stool....pensions and personal savings were supposed to be the other equal legs.

But now even the lucky few who have pensions may see that leg disappear too.  As the paragraph above mentions...GM and Ford are planning on terminating pension plans for hundreds of thousands of retirees...and the pension plans left in the public and private sectors are becoming so underfunded because of 0% returns over the past 10 years that many of those will probably roll up too.

So...let's review...no pensions, little or no savings and SS is already well on the path to insolvency.  I think that just about takes care of the three legged stool plan.

In the olden days, parents had 6-8 kids in hopes that some of the kids would make it into old age to help care for their parents.  But of course at some point, kids became too expensive and the government added a bunch of social programs...so having a bunch of kids changed from being a blessing from God and morphed into simply having one or two just for the experience.

Newsflash; one or two kids can't financially support one or two parents.  Even worse, the kids aren't saving any money and are barely scrapping by themselves, so in what alternate universe does this make and financial sense?

Now here is the final nail in the coffin;  Nursing homes cost on average over $6000 per month!  And the chances are good that either mother or father will spend some time in a home.

Put a fork in it....this thing is done.

Only Jesus can save us now.  The schemes of men are starting to to fray.

Thank you Jesus that you have been working on our eternal homes because our earthly homes may not be in such good shape for too much longer.