Retirement Reality Full Frontal: Why Every 30 Year Old Must Risk It All To Be Able To Retire

Tyler Durden's picture

Exceptionally low interest rates are bad for banks, insurers, and, more generically, anyone wishing to save money. Of the three, it’s the situation of the savers that is most untenable. In particular, Citi notes in a recent report, those wishing to retire at 65 or thereabouts are in for a nasty surprise when they start to run the numbers.


Citi: US Credit Outlook

Given that real yields are negative for Treasury bonds inside of 20-years, the steady stream of inflows into investment grade bond fund that hold a mixture of government, agency, and high grade corporate securities, will simply fail to return an adequate rate of return commensurate with the current savings rates of most retirement savers. What savers need to do is find higher asset returns or increase their personal savings rate.


And therein lies the crux of the problem facing the central banks.


Ideally, the Fed and ECB want to encourage investors to buy riskier assets and corporates to borrow more with the hope being that wealth effects, corporate risk taking, and Keynes’ animal spirits will revive the economy.


But so far the US has failed to respond to Fed’s treatment plan and the inflows into bond funds continue unabated while corporate net issuance is nonplused. One presumes investors are wary of returning to an asset class, like equities, that performed so miserably over the last decade amid global growth concerns.


But an unintended consequence to resisting the Fed is that the average retirement saver will need to double their rate of savings in order to be able to retire even five years later than originally planned. If and when that sort of analysis enters into the collective consciousness of the typical American, the economic impact is likely to be grim.


As we’ve seen in the UK, higher savings rates lead to lower consumption, a decline in corporate profits, and recession.


Source: Citi

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Zer0head's picture

down under she makes $2 million every hour  (

view this impassioned video to those in the land of Oz 'bout opportunities on the dark continent where $2/day has you livin' the good life

erg's picture

I hope to at least croak during a break period. That way I don't possibly muck-up some machine.

Ever the considerate guy am I.

Rincewind's picture

Now that video made me sick.

Dr. Sandi's picture

Screw iron ore.

Gold bitchez!

(I can't believe I got to say it first on this thread. My night is made.)

TruthInSunshine's picture

Here's the balancing act the corrupt central bankers are trying to pull off:


In order to prop up the massive number of de facto insolvent financial institutions that now exist in zombie form (because even low interest fiat loans in massive quantity & the ability to mark their toxic assets to fantasy levels is not sufficient a lifeline given that their traditional models for reaping profits are broken), central banksters need to force private sector deleveraging while prompting public sector consumption (as incredibly wasteful, inefficient & ultimately destructive as it is).

Hence QE & Twist, coupled with ZIRP, & then NIRP. This taxes savers, while encouraging even insolvent governments to borrow given artificially low interest rates, which allows them to temporarily deny the reality of their shockingly horrible financial condition.

At the same time, private sector consumption is suppressed, and massive wealth is transferred to entities and individuals having businesses that intersect with government spending, along with financial institutions (that just happen to own the politicians, literally).

Bernanke, Congress & the Executive Branch not only do not care that private sector consumption and organic economic activity is being thwarted by current monetary policy as run by the Federal Reserve, they're all complicit in wanting to perpetuate this trend, as those who really call the shots are the lenders to governments, and ultimately have a superior lien on all the assets of nations.

If Americans & Germans need to deleverage and adjust their living standards down many notches as the price that must be paid in order for The Money Masters that own "democratic governments" to get their pound of flesh, and be nursed from the teat of the state, then so be it....

Capitalism is truly dead. 

Muppet of the Universe's picture

WOW. That was just amazing.  Well written and perfect.  We truly are in quite the predicament...  & Ben Bernanke is that tightrope master, that must balance inflation versus asking the muppets to work harder for less.    It is truly an odd time to be alive...  & quite mind boggling that this is still how the game works... 

I dedicate this to all the hardworking shmucks that are awake and trapped in this shitstorm from Oz:

Zero Govt's picture

pigs at the trough, that is Govt in a nutshell

the health of the real economy, that pays all the bills, has no muscle in this parasite-fest we call democratic Govt

the sooner everyone wakes up to what Govt really is, and not what it claims to be, the better

GCT's picture

Spot on Truth! +1    

ebear's picture

These all-powerful financial institutions.  How many divisions do they have?

rbg81's picture

But an unintended consequence to resisting the Fed is that the average retirement saver will need to double their rate of savings in order to be able to retire even five years later than originally planned.

Uh, let's get real.  There is no way Joe/Jane Sixpack is going to double their average retirement savings.  Most Americans save nothing.  They can't--they're too busy treading water just to pay their bills.  In fact, they are deep in debt trying desperately to maintain their lifestyle.  I make more than I ever imagined but barely save any $$ after bills and taxes.  Honestly can't imagine how someone making $50K/year is saving jack squat. 

Let's face it:  ZIRP (NIRP) is a backdoor tax on savers.  Because savers are responsible people who won't riot (at least not yet), they are the sacrificial lambs who will take it in the shorts.  The whole point is to do whatever is necessary to keep Government deficit spending affordable.  That's true in Europe and true here.  At this point things are so screwed that if the Government entitlement pump ever misses a beat, half the population will riot.  You see these people at Walmart, wearing cheap t-shirts, sporting beer bellies, waving their EBT cards and abusing the cashiers.  They are the real Zombies--its all Bernake can do to keep the Zombie Apocalypse at bay.

aint no fortunate son's picture

Yep, right out to max risk where the TBTJ's are swimming in a school waiting for the feeding frenzy

Freddie's picture

There are many good for 30 year olds.  Phil Falcone's hedge fund - he has a lovely "trophy" wife.

Apple stock - it always goes up - buy the dip.

Facebook - everyone uses it.  


The list goes on and on.  Also historically the stock market ALWAYS goes up 8 to 9% over the long term.  The S&P 500 index is great for that.

Also Berkshire Hathway with the Omaha sage and friend of Becky Quick.

Just stay away from those barbaric relics (metals).

midtowng's picture

Unintended consequences from monetary policy. Not being able to get a free lunch. Who could have thought of that?

WhiteNight123129's picture

Who said that saving was about making money? Since Gold, Silver and commodities are joined at the hip, you do not need to make money but store value for future consumption that is it. The ~yield~ is a short term bribe to keep accepting the fiat, no more no less. Hoarding dishoarding as Fullarton menioned along with privated market dictated interest rates, are the way to regulate credit.


buzzsaw99's picture

fuck citi die bitchez

Zero Govt's picture

beautifully put

i'm cryin  ;,)))))

nmewn's picture

They call me Machine Gun Kelly.

Muppet of the Universe's picture

That's what Citi calls their zero-sum, front running, HFT bots.

nmewn's picture

I see lots of geriatric gangs in our future ;-)

Xibalba's picture

Why would central bankers want slave labor..I mean, the middle class, to be able to retire? Doesn't that defeat the whole point of central banking, and usury in general?

Zero Govt's picture

we're the suckers, we allow it without much of a whimper

bigwavedave's picture

I might start my Cancel Christmas campaign earlier this year.

fonzannoon's picture

this article mistakenly seems to think central banks give a flyin fuck about the avg 30 year old. as a 35yr old my plan is to own phyz and wait till the whole thing collapses. put that plan in your retirement calculator.

Dr Benway's picture

They want to force everyone to join the ponzi scam, that way we are all culpable and noone will speak out as we feast on our children and the unborn.

FiatGold's picture

Phyz is for real!

Ounce of silver in my hand is not a promise to pay but proof I have been paid in full.

TheSilverJournal's picture

Most who buy silver will be able to retire next year no matter how old they are.

Zgangsta's picture

How many Hawaiian islands will an ounce get me?

vintageyz's picture

Or, how many ounces did President Choom buy in Hawaii?

mademesmile's picture

Specifically, how many ounces do you think it will take for the average family living on $40K a year?

cranky-old-geezer's picture



I'm surprised how many think they can weather the coming calamity merely by holding PMs while the currency collapses.

If you're out on 500 acres, nobody around for a mile or so, you're stocked up, big garden, truly self sufficient, you might do ok for a while.

But everywhere people are bunched up together it's gonna be anarchy.   Anyone with food, water, electricity, etc, is gonna be assaulted by people wanting those things, and they may be armed just like you are.

It won't get that bad you say?

Maybe not.  Maybe the military will stage a coup, take over the government, arrest the bankers, stop the currency destruction before it gets that bad.

It's the only hope we have.  If the military doesn't do it, we're fucked.


TheSilverJournal's picture

How about nobody takes over the government and we just change it. Cut the Federal Government by 90% and we'll make it.

cranky-old-geezer's picture



Wonderful idea.  What's your plan?

Waffen's picture

The only way to change anything is by returning the gun to politics.

The military like our government is controlled by Israel so I don't see how a military coup will solve anything. We live in an artificial society of multi culturalism and multiracialism only possible do to our artificially strong fiat dollar. When things collapse the parasitic classes will not just change their ways, there will be lots of violence and destruction.

Our only hope is for balkanization and for certain areas to be able to remove the parasitic classes from their midst and to start over. This of course goes against the plan of zionists so it's a long shot, but it's our only hope of not all being global peasants and slaves to the global Zionist anti human scum at the top.

Freddie's picture

The military, joint chiefs, Pentagon kissed Mullah Choom's arse for the past 3+ years.  As long as they get new drones and other BS - they will go along. 

They all want cushy gigs at defense contractors.  No one in the USA shithole will stand up for The Constitution.  The sheep/serfs who watch TV and Hollywood's crap are totally brainwashed.  If you watch it you enable them sheep.  

rbg81's picture

No taxation without representation was the rallying cry on which this country was founded.  Problem is that the flipside needs to be true as well.  If you don't pay net positive taxes (e.g., more in taxes than you get in Government benefits) you shouldn't be allowed to vote--period. If this policy were instituted, our economic problems would be solved very quickly.

docj's picture

I'm perhaps fortunate that I ride a desk for a living - I can probably do it (assuming my mind doesn't go to mush first) until I literally am pushed out of my office feet first. Because I hear people talking about this "retirement" thing and I honestly have no idea what they're talking about.

So yes, another unintended (or perhaps perfectly intended) consequence of Benron and company "saving the world" was to dork every single prudent saver in the world up the pooper with a pineapple, sideways. Thanks, Benny. You're a prince.

blunderdog's picture

   I hear people talking about this "retirement" thing and I honestly have no idea what they're talking about.

Some folks are really committed to cashing bad checks.  They'll keep trying forever.

Bunga Bunga's picture

Why save for retirement? It will get vaporized anyway.

JackT's picture

Why save for retirement when no else is. Ask around and cringe at each blank look you get.

JackT's picture

Here's another one...

Why save for retirement when you can buy baby boomer assets for pennies on the dollar when they begin to liquidate.

aerojet's picture

I don't need their crap, I need a savings I can depend on in case someone in my family gets sick.  I'd also like to educate my two children just in case it helps them somehow. 

Vlad Tepid's picture

Educating your kids doesn't cost a dime.  A library card and an internet connection as well as a good pair of walking shoes should do the trick.  If you want to pay some schmuck from NYU to brainwash your kid, well, that you'll have to pay for.

aerojet's picture

It's not for retirement--it's for a "rainy day."

Bunga Bunga's picture

... will get corzined before the "rainy day".

Bicycle Repairman's picture

It's a simple spreadsheet exercise.  Just put in 1% for an interest rate.