Those of us in the boomer generation may remember a television show called “The Millionaire” where an anonymous philanthropist
gave unsuspecting ordinary Joe citizens a check for $1,000,000 and watched how their lives were vastly changed by the ability to buy virtually anything they wanted in life.

Today, a million dollars just doesn’t buy what it used to. A modest three bedroom home in L.A. or a $40,000 annual retirement income. Do you feel like a millionaire when you learn that it buys you a $40,000 yearly retirement income?

Thinking about retirement? The concept of “Retirement” where the government and your employer took some responsibility for your financial future only existed in modern history for about 50 years (from 1935-1985.) Today, whether you are or become financially independent is truly up to you! Lee Eisenberg, author of “The Number” and a former editor in chief of Esquire chronicles the following historical timeline to help put your thinking clearly into perspective:

Americans born in 1900 had an average life expectancy of 49 years. “Retirement” wasn’t a certainty. In fact, it didn’t even exist. People that lived into their 70’s just kept on working until they died.

The concept of “Retirement” was created by early twentieth century business employers who saw greater profits in shortening the careers of older workers. As workers grew older, business managers began to view them as “unproductive”.

Social Security in the 1910’s and 1920’s didn’t even exist. To qualify for a corporate or union pension, you needed to work for at least 30 years AND reach the age of 70 – when life expectancies were age 49. More than 50% of all older Americans lived with their children or other relatives in small homes where three generations canned foods and peeled potatoes to subsist. Retirement planning consisted of drawing up wills bequeathing their worldly goods to their children only if their kids carried through on feeding and housing them.

In 1935, Eleanor Roosevelt announced the government’s plan to give the grandparents the dignity of living in their own homes, not their childrens’ – with the passage of the Social Security Act. Thus began the golden age of the federal government entering the ‘taking care of you’ business.
World War II in the 1940’s forced employers to freeze workers wartime wages. When the war ended in 1945, corporate employers began to implement pension plans (with fixed monthly payments for life) as a way to attract workers in a competitive job market. By 1960, nearly one-third of American workers were eligible to receive a pension check from their employers. Additionally, Social Security benefits experienced growth, when the age to receive benefits was lowered to age 62 and four in ten Americans began receiving broadened disability benefits.

Circa 1965, add the medical piece of the pie. Medicare started providing basic health insurance to everyone over the age of 65. The golden age (1965-1985) of government and business providing you with a safety net was now in place.

Long about 1985 – you find both government and business beginning to back away from the “taking care of you” business. Companies found pension plan promises to be too expensive to provide. Instead of guaranteed benefits, 401-k plans (and their equivalents – 403-b, 457, TSA’s, etc.) were implemented promising neither a fixed dollar amount or a fixed monthly income at retirement. Politicians of both major parties have danced around directly stating the need for the individual to take responsibility for themselves by quietly increasing the dollar amounts that individuals can deposit into 401-k’s, IRA’s, Roths, and other type of retirement plans not paying specified benefits. Without further changes to these systems, Medicare will be technically insolvent by 2014. And the Social Security “Trust” fund will be exhausted by 2041. Actually, the agency’s most recent correspondence states that “there will only be enough money to pay for 74 cents for each dollar of schedule benefits” in 2041.

So as the support systems of the government and businesses are fast fading, people are beginning to feel discontent about tomorrow. And if $1,000,000 only allows you to eat modestly and live under a single roof, here’s what it takes to be:

Comfortable Plus - $2-5 million
Maybe a second small (vacation) home

Kind of Rich - $7-10 million
A couple of nice houses, eating/drinking/traveling
well, ability to enjoy finer things and still give away
some money

Rich – greater than $20 million
An exclusive gated (golf) community to live in for
every change of season, months of travel abroad,
private jets and yachts for transportation

It’s fine to aspire to these lifestyles. Unfortunately, 82% of Americans have set aside less than $100,000 towards providing for the rest of their lives (representing a $4,000 per year income) If this information makes you nervous about tomorrow, then we’ve done our job. Conscious awareness of the need for you to take care of yourself financially for the rest of your life is imperative. Depending on the government or your employer means facing a potentially dim reality of your financial future. Do yourself a big favor – if you haven’t started planning, get moving NOW!

Author's Bio: 

Bill Taber the President of Taber Asset Management. He has 32 years of work experience in portfolio management, securities sales, and commercial banking with TABER Asset Management, Principal Financial Securities, E.F. Hutton & Co, Inc, and Bankers Trust Company. He is currently seeking to recruit experienced and successful portfolio managers to continue building a world class investment management company. His company utilizes a cloud computing platform to do business around the world.

If you are interested in learning more about this opportunity, contact Bill by clicking here.