We covered this topic many times in the past, and our overall take was that things would only worsen with the passage of time. First, it was Detroit; now it’s Chicago, and soon it will be a city next to you. The common theme is that the City cannot find adequate ways to balance the budget. What they are not telling you is that they do not want to cut the high salaries city and state officials are getting for doing next to nothing. On top of this, these officials usually throw lavish parties and gatherings that cost the taxpayer a fortune. Lastly, lucrative contracts are given to companies, and the bid is not always the best. There are many ways the budgets’ could be balanced if common sense measures were put to use, but corrupt officials will resist right to the end. They would rather cut your pension than cut their benefit. Hence, we expect the situation to progressively worsen to the point that it finally dawns on the average American that they need to take their financial future seriously and make alternative plans as opposed to depending only on a pension for your survival.
When you look at all 50 states, we have $5.17 trillion in obligations and only $1.92 trillion set aside to fulfil these pension obligations. A gap of $3.2 trillion and rising and this disaster is not restricted just to government pensions. Roughly 79% of the 100 largest U.S Corporation’s pension plans are properly funded. 50% of workers have less than $2,000 saved for their retirement. Now you understand why for years we stated that one should strive to live 1-2 standards below their means and put this money aside for other investments.
For roughly 35% of Americans, their sole source of income is Social Security payments.
City, state and Federal workers better make alternative plans, for when it comes to biting the bullet, government, and corporate officials will sell you out within the blink of an eye. For example, Lawmakers in Illinois are looking for a way out; it is the most underfunded state in the country. Roughly 25 cents of every Tax dollar is spent on pension funding. They are putting proposals that would allow pensioners to take a lump sum payout on retirement, but there is a catch. You would have to take a cut of as much as 25%. As we projected years ago before anyone was even talking about this, the situation will only worsen. Hence, live 1-2 standards below your means and if you want to be radical, try out three standards below. One standard below means living within your means, so you are really doing nothing extraordinary for most people live well beyond their means.
Look at the pension nightmare unfolding in Chicago; this is what lies in store for the rest of America
Take control of your finances by understanding how money works. Then take the time to get to know the markets, you can start off by looking the many extensive resources we have listed for free. Additionally, you can sign up for our free newsletter where we show you how to utilize the principles of mass Psychology to stay on the right side of the markets. It’s your money and if you do nothing the government will be only to happy to take away everything you have worked for your whole life. Inaction is no longer a choice; standstill and be run over or act and be saved.
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