Investor CAFÉ

Danger Ahead: Are Retirees Running Out of Money?

On August 5, 2018, the New York Times ran an alarming cover story: “Too Little Too Late: Bankruptcy Booms Among Older Americans,” which claimed that bankruptcies among retirees have skyrocketed due to “vanishing pensions, soaring medical expenses, inadequate savings.”

Several economists disputed the claim, noting that at most only 2.7 persons per 1,000 retirees have entered bankruptcy. Still, the fact remains that too many retirees have failed to save enough and have made too many bad investment decisions, so that when they retire, they end up depending too much on Social Security to fund their retirement. 

Surveys show that the #1 concern of older people is running out of money. 

I know too many seniors who stay at home rather than travel the world or attend a conference because they fear that if they spend too much, they will run out of money. I always respond, “Don’t worry. You are going to die a millionaire,” and for most seniors, that’s true. But not all. 

Social Security was always supposed to be a supplemental retirement income, not the main source of income. For most seniors, that’s still the case. Retirees depend on their pensions, individual retirement accounts (IRAs) and part-time work to survive and prosper during the golden years.

The biggest fear is the cost of a major devastating illness that could cause hundreds of thousands of dollars in medical bills not paid for by Medicare and private insurance. It’s a legitimate fear. 

The key to avoid running out of money is to live within one’s means, make it easy to save money regularly and invest those savings in good long-term investments.

Advice from Dr. Z

Responding to the New York Times article, a Dr. Z admitted to doing just that: 

 I am by no means rich and my earning years were greatly reduced by a long stint doing grad research in a university in a field that had little to no job prospects.

“However, I fully understood the importance of compound growth and started investing for retirement when I entered the workforce (with no training in the field I entered) at the ripe age of 35.

“I am now retired and find that my required minimum distributions, Medicare plus my Social Security benefits give me way more than I need, causing me to be a major contributor to state and federal revenues.

Amen!

I Make Money While I Sleep

If you have any worries about not having enough money when you retire, I urge you to read a Rich Man’s Pearl of Wisdom #3, “I Make Money While I Sleep.” See pp. 172-175 of “The Maxims of Wall Street,” 5th ed., now available for only $20. I autograph each copy and mail them at no extra charge, as long as they are mailed inside the United States. You can buy additional copies for only $10 each. They make great gift books. (If you order a whole box, containing 32 copies, the cost is only $300.) To order, call Harold at Ensign Publishing, 1-866-254-2057, or go to www.miracleofamerica.com. (If you order from outside the United States, call Harold for extra shipping charges.)

Upcoming Conferences

Join me at the San Francisco MoneyShow, Aug. 23-25, Hilton Union Square: I’m scheduled to debate Mike Turner again on “Buy and Hold vs. Market Timing.” Plus, listen to Jim Woods (Fast Money Alert), Jeffrey Saut (Raymond James), Gene Simmons (KISS co-founder, vocalist and bass guitarist), John BuckinghamNeil GeorgeMarilyn Cohen and Kelley Wright. To get your free tickets, call 1-800-970-4355 and be sure to mention code 045690.

Toronto MoneyShow, Sept. 14-15, InterContinental Toronto Centre: I will have a main stage appearance on “Everything You Need to Know about the Markets,” as well as a breakout session on “The SWAN Strategy: My Five Low-Risk Ways to Earn High Dividends and Capital Gains.” Other speakers include Kim Githler, Tom Sosnoff and Gene Simmons. To register and attend for free as my subscriber, call 1-800-970-4355 and mention priority code 045972. Or go to MarkSkousen.TorontoMoneyShow.com.

New Orleans Investment Conference, New Orleans Hilton, Nov. 1-3: The granddaddy of hard-money conventions, I’ll be there this year to speak on a controversial subject: “Investors, Beware! Why Gold Bugs and Austrian Economists Often Offer Bad Investment Advice.” They are often right in theory, but their timing is off, and that can hurt your portfolio. Don’t miss other celebrity speakers including Mark Steyn, Jim Grant, Jonah Goldberg, Dennis Gartman, Rick Rule, Robert Kiyosaki and Brien Lundin. Be sure to mention you’re a subscriber to Forecasts & Strategies when you register. Go to http://neworleansconference.com/wp-content/uploads/2018/08/NOIC_2018_Skousen.html. Or call toll-free 1-800-648-8411.

You Blew It! The Story of the Last Statesman in America

They say that the definition of a statesman is a failed or retired politician. 

Two weeks ago, Senator Paul Laxalt, Reagan’s “first friend,” passed away. We are going to dedicate a room to him at next year’s FreedomFest. This story is one reason why:

Republican candidates, running concurrently with the 1964 federal election, were undermined by the unpopularity of Senator Barry Goldwater from Arizona, the Republican nominee for President against the incumbent Lyndon B. Johnson.

I remember the 1964 election and was a big fan of Goldwater.

Not long before election day, Goldwater scheduled a visit to Las Vegas. Paul Laxalt was running for the Senate, and his handlers told him he should avoid appearing with Goldwater, as they feared any association with Goldwater would spell trouble and lose the election for Laxalt.

Laxalt, who often described Goldwater as his “political Godfather,” told his aides, “Listen, Barry Goldwater is my friend. If I snubbed him now, I could never look him in the face again. I would rather lose.”

The Laxalt-Goldwater meeting on the tarmac was splashed on the front pages of local newspapers.

Goldwater ended up losing Nevada by 28,000 votes and was easily defeated by Vice President Johnson.

Still, the Laxalt-Cannon race remained far closer than expected. As he watched the returns come in from his home in Carson City, Laxalt was stunned when one of the television networks actually declared him the winner. The next morning, he flew to Las Vegas to celebrate his victory, but when he arrived he was told that certain precincts reported late, and that Howard Cannon had won by 48 votes, among the narrowest margins ever in a popular election for the U.S. Senate. The race was the subject of intense controversy for years.

Paul Laxalt was an honest politician, a rarity. Loyalty of this kind is a lost art in today’s politics.

Laxalt later went on to be governor of Nevada, and then eventually made it to the Senate. He was Reagan’s campaign manager and was chairman of the Republican Party during the 1980s, closely aligned with President Reagan. 

I never met Senator Laxalt, but I did meet Barry Goldwater once in Arizona. I’ll never forget his enthusiastic look in his eyes, like we were long lost friends.


Sign Up