The Age Crisis: A Personal and National Catastrophe 

The Age Crisis: A Personal and National Catastrophe  Wealth Daily
Alex Koyfman Photo By Alex Koyfman
Written Nov. 16, 2017
Aging is a very personal thing.

Despite the fact that it always ends in the same outcome, the paths we take to get there are unique to the individual.

Unfortunately, the hazards we encounter on that path are numerous, and usually deadly.

Heart disease, dementia, osteoporosis, Parkinson’s, a slew of different cancers, and, if all that fails, just a slow, gradual decline that robs us first of our physical abilities and, eventually, decays the cognitive as well.

Anybody who has watched their parents or grandparents decline knows what I’m talking about. The uncertainty of what the next day will bring, the terrifying moments of awaiting the results of lab work or the opinions of doctors.

These are all things you already know, on a personal level, about the process of getting older.

But as we’re wrapped up in the individual experience of watching our loved ones go through it and contemplating our own future, we tend to forget that on a national level, aging has turned into a silent crisis.

Americans, as a population, are getting older.

I know this may sound like a foregone conclusion to you, but it’s not the case in all countries and is generally isolated to the wealthier first-world nations of Western Europe and North America, as well as Japan and, with its birthing limitations, China.

averageamericanage

Which means the prospect of dealing with all the issues relating to age grows closer and closer for a larger segment of the population.

This will contribute enormously to an already overburdened health care system, as longer life expectancies bring with them almost exponentially rising costs.

US health care costs by age

And if you’re younger than about 45 today, you can forget Social Security.

That is expected to run dry by the mid 2030s at the latest, so whatever meager benefits that could have brought, most Americans living today will never get to see a dime.

It’s a perfect storm as far as personal crises go because the rising costs arrive alongside progressively diminished physical capabilities, creating a financial vacuum that usually gets shouldered, at least in part, by the next generation.

On a national level, however, this social crisis has the potential to derail the entire economy.

An Aging Nation

It makes the concept of retirement — once a given for most working Americans — a more and more distant fantasy as we move forward in time.

I’ve found myself quite fortunate in this regard.

I don’t have to worry about my parents, who are now both in their 70s.

They did a great job planning, saving, and investing, and now, even with mounting medical bills, they are more than covered even if they both live past 100.

The problem — and it’s a major one — is that very, very few people can say the same thing.

In a country where almost half the population couldn’t raise a mere $2,000 in 30 days’ time, it’s hard to imagine what elderly citizens hope to do to finance years, perhaps decades, of zero-income living with dramatically rising overhead.

According to Business Insider, the average total asset value for Americans aged 75 is about $155,700.

Modern Horror: Life After Your Retirement Savings Are Gone

While this may seem like a lot, remember, it’s not liquid assets; it’s everything.

It’s the savings accounts, the equity in the home, and everything else with long-term value.

Liquidating such an estate in an emergency would most likely not yield market value, but even if it did, by the time the average American reaches that age, it would only cover about five years of uninsured medical expenses.

That’s not counting other regular expenses like food, utilities, dwelling… if there is even one left at that point.

Even with insurance, the cost of premiums and out-of-pocket expenses is already high and always on the rise, making the dream of a comfortable, carefree retirement simply unrealistic for a substantial segment of the population.

If this sounds bad, I hate to add fuel to the fire, but it gets a lot worse.

Right now, most people’s individual retirement accounts (IRAs) are very heavily if not entirely dependent on the state of the stock market.

We’re currently in the ninth year of a bull market, a bull market that has seen the DOW more than triple over the course of that cycle.

Remember back in 1996 when then-Federal Reserve Chairman Alan Greenspan warned us of “irrational exuberance” pertaining to the dot-com boom?

It’s 1996… All Over Again

Well, if you said yes, you’re apparently in the minority, because investors today seem to have either forgotten that downturns exist or never knew about them in the first place.

The market hits new highs almost daily, and instead of getting weary, investors — all the way up to the institutions — think it’s a sign that there is only more growth to come.

There isn’t. It’s impossible. The bull run is long overdue for a correction, and to go on without one would only condemn us to an even worse correction down the line.

When it comes, and it will, the hit to existing retirement accounts will wipe out hundreds of billions, perhaps even trillions of dollars in value.

And because nothing of that magnitude happens in a vacuum, a massive correction will come with secondary “splash-over” effects like the housing market, the retail market, and everything else involving discretionary consumer spending.

So just when you thought retirement was going to be tough, it just got tougher… and more dangerous.

These are waters you cannot tread by playing the lottery. Hoping and waiting is not a viable option.

It’s a problem that has the potential to wreak economic havoc across all segments of the population, old and young alike, so even if you’re just a student, you’d better believe that it matters to you.

We’ve been aware of this looming “silent crisis” for years now, and it’s been our goal to figure out the best solutions possible.

The following is a podcast, recorded by one of our wealth experts, Brit Ryle, on the topic of retirement investing dangers.

It’s the very tip of the information iceberg, but it should get you off to a good start in understanding the pitfalls.

Click here for access.

A full-length informational video, along with a detailed report on how to avoid those pitfalls, will be published next week, so stay tuned.

Fortune favors the bold,

alex koyfman Signature

Alex Koyfman

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