Friday, January 16, 2009

Americans Are Pushing Off Their Retirement Due to Economic Problems

Americans have lost about $2.8 trillion, or 32% in value of their retirement accounts, as of December 2, 2008, compared with September 30, 2007, according to the Urban Institute, a Washington think tank. I can tell you from my own experience that I have lost 33% of the value of my account. I guess I'll be waiting longer to retire.

For some folks, it will take them a lifetime to get back what they lost due to the greed of the economy. Yes, I'm back to that word again. I honestly do not believe we will ever learn our lesson when it comes to the economy. With a global economy, it doesn't take much for the dominoes to start falling as well as our retirement accounts. The crash of our retirement accounts is the only sound we hear.

Why did this happen? We trusted our money to people who just wanted big bonuses. What do they care? In most cases, if the fund manager messes up, he gets to leave with a massive severance package and the people who have to deal with the losses of their accounts get to pay for the problems. Mistakes happen, but when it is a result of just plain greed, I have a serious problem with that as should we all.

What can we do? It's easy. Take control of your money and do your homework. I have noticed that more and more us just simply and blindly turn our money over to someone we just met. We look at charts and graphs and listen to the pitch about how much money we could make. He glosses over the risk while visions of dollar signs dance in our minds. We think about the old television program with Robin Leach, "Lifestyles of the Rich and Famous". We have those "champagne wishes and caviar dreams". So, we turn our money over to them and we think we will be retire in five years and we will be on a beach in Maui or skiing in Colorado and wondering what the poor folk are doing.

Come on, pilgrim! Wake up. It isn't going to happen. The fund managers in most cases do not have a vested interested in our future. They get their salaries and bonuses. When things turn south, they are out the door and in their car before the last bell of the stock market. Take a look at Bernard Lawrence Madoff. He admitted to his senior executives at the firm, which included his sons, that the asset management and advisory segment of the business was, "basically, a giant Ponzi scheme." According to FBI documents, the company has $50 billion worth of liabilities. People and banks have admitted that they may have lost millions of dollars due to Madoff's Ponzi scheme.

I guess we don't have to worry too much. I'm sure the government will bail us out.

Click here for the full article at Reuters.

No comments:

Post a Comment