How Will They Pay For The Lock-down? Your Savings…

I missed it but fellow blogger WillisBryan picked up on it.In his post “How will they pay for it?” he highlighted a very scary option for paying for the national lock-down…your savings…our savings. Head over there and tale a look. He links to articles by top Biden advisors on this subject.

The easy option on this is to simply remove the money form your savings accounts. Maybe as soon as inauguration day, assuming Trumps recounts and legal challenges fail.

One minor detail with that. Anyone planning to pay for their retirement with a 401K or IRA account is scr*wed. Can’t take that out without penalties and extra taxes so it will be ripe for stealing borrowing.

Don’t worry, we’ll have Social Security to take care of us in our golden years right? Yep, except that little pool of government debt was expected to be dried up in 15 years (2035) and that was before COVID and the oil bust. Expect that pool to be drained even more quickly now.

Lord help us…

Yet Another Debt Warning…

The US Government is broke. No, sorry, the US Government has spent itself into near bankruptcy. There is no way, let me repeat that, NO WAY, the US Government can pay back the current debt much less the Trillions we continue to add to it. Trumpet can’t growth the economy enough to do anything more than postpone the inevitable. Immigration Reform, just a slippery way to, in the short term, shore up Social Security only kicks the can a little further down the road and make the cliff at the end of the road that much higher.

Now, I don’t just blame the slimy, spinless politicians. I blame the voters of the United States. We elected those idiots politicians and we are the ones who will promptly vote out of office any politician who talks fiscal sense. Any real action to reduce the national debt is literally political suicide because none of us are willing to face the tough choices we need to make.

Since the cliff is far enough down the road; after the retirement of almost all current politicians they can safely ignore it and pass the buck to our kids and grand kids. Many of whom are blindly voting for more spending by any politician who promises “free.” If we don’t elect a Socialist in the next presidential election, we will in the one following that.

Socialism will kick the debt can a little further down the as they nationalize industries and confiscate private wealth (including retirement savings). This is why we are trying so hard to leave our grand kids some hard assets to help them through the coming collapse (precious metals, cash, land, firearms, ammo, etc.). Some see that as silly but I want to do everything I possibly can to set them up for success in an increasingly dangerous world.

Anyway, that’s enough soap-boxing. Here’s the video that triggered this little rant:

Take care and God bless.

“So Called” Social Security

The trustees of the Social Security trust fund released their annual report in April. The good news is that due to the strong economy costs will not exceed income for another year or so ( Fiscal Year 2020).

Unfortunately, they are still predicting that once that happens the fund will be depleted by 2035. At that point the fund to pay benefits will have to come from General Federal Revenues (Link). Considering the fact that the US Federal Government is already $22.3 Trillion in the hole and digging about $1.1 Trillion deeper into that hole every year, how long will they be able to pay up?

Are you counting on Social Security for retirement? If so, you might want to start working on a “Plan B.”

2019 Preparedness Assessment (Part 3: Retirement)

Ok, so retirement is not really a disaster in and of itself. However, it can be if you have not prepared for it.

Social (in)Security

Most folks in the good old US of A don’t plan for retirement. After all, that’s what Social Security is for.

Right?

Most of us have been paying into it for all of our working lives and expect it to be available when we need it. Unfortunately, that probably will not be the case for my generation. The Social Security has pretty much always been a bit of a scam. Initially the plan would have supported only those who paid into it, like a retirement savings plan. However, that didn’t help all those folks who had already retired so it was changed almost immediately so that those working today pay for those who have already retired. That sort of a pyramid scheme worked great as long as the average life expectancy didn’t increase (it did) and each generation of workers was as large or larger than the previous one (not anymore).

As a result, the trust fund that was supposed to provide benefits for those with disabilities is already exhausted. Our elected leaders have not made any effort to fix this problem and it is being funded out of general Federal revenues and is one of the drivers of the Federal deficit.

Overall, according to the Social Security Fund Trustee’s Report, Social Security will continue to take in enough money to cover expenses until sometime in the next few years. At that point in time, the deficit will have to be paid out of the trust fund itself; essentially the program will begin eating itself.  It will take a bout 17 years to deplete the trust fund assets completely. Based on my age and expected date of retirement I will be lucky to collect on what I have “contributed” over my entire working life for a few years, maybe as many as ten, if I am lucky. The Federal government is obligated by law to make up the difference out of general revenues but with the current federal debt levels how long will that last?

By the way, the push from both parties to naturalize illegal aliens resident in this country is just a way to “kick the can a little further down the road.” By increasing the number of people paying in to Social Security they can postpone the inevitable until the current generation of politicians is retired from public office.

So, if we can’t count on so called Social Security can we count on? Well, nothing is completely safe so it is best to hedge your bets a bit…

1 – Pay Stuff Off

One of the keys to the plan we have put together is to make sure the big items in our life are paid off before we retire. House, cars, etc all paid off before that time comes. But it doesn’t stop there. We’re planning to revamp the major systems in the house and buy new cars before that time as well. Now, one of the biggest questions we are struggling with is whether to stay in our current house or not. The taxes in this area are skyrocketing and despite that the city, like most big cities in America, is on a slow(ish) slide into bankruptcy. Logic says we should sell an buy some acreage out a ways, off the beaten path a bit. But this is home…

2 – Investment-based Retirement Plans

We were poor when we first met and we stayed poor for a big chunk of the time we have been together; feed a family of five (later six) on less than $40 a week poor. We are no longer poor but we couldn’t start putting anything aside for retirement for a long time. This means we’re playing catch up so investment-based retirement plans, especially employer supported 401Ks that offer matching funds are super critical. We just can’t build the funds we need without such plans. Unfortunately, this means the performance of the investments is critical and we all know the stock market is (at best) a risk.

Another risk of such plans comes from the Social (in)Security shortfall. Like many other nations have already done, there is a real risk that private retirement plans could be “nationalized.” Call it nationalization or outright theft there is a risk that this money could disappear when it is needed most.

3 – Precious Metals 

To help balance the risks of investment-based plans, some of our retirement funds are channeled into physical assets like precious metals. Besides being a hedge against inflation and the loss of value that comes with fiat currencies it is a good way to store value in a way that is somewhat off the radar. We are also looking into investing in land as well.  Anyone who reads this blog knows I have been investing in lead, brass and copper for a while.

4 – Cash

While it is a losing proposition to have cash in the bank (where it also at risk of being seized by a cash starved government), having funds readily available for emergencies is also and important safety net for financial disasters. It is also another way to save for retirement.

So, that’s our strategy. What are we missing? Any other suggestions?

Take care and God bless.

 

What The Heck Am I Preparing For? (Part 1: The Background)

Warning: This is neither an upbeat nor positive post. Wonderful Wife says it is downright depressing.

Over the last several decades I have become ever more concerned about the state of our nation and the state of our world. Maybe it is fear related to age or maybe it is wisdom related to age but sure seems like the world has become a far more dangerous place. I grew up with the threat of nuclear annihilation as something very real and tangible. There were regular drills in school for what to do in case of fire, tornado or nuclear strike.  The riots and unrest that accompanied the Vietnam war, the forced integration of schools, race riots and Watergate were more common fare on the one TV set in our house than cartoons but as a TV junky even back then I watched it all. Still, today seems worse. Like I said maybe it is an age thing or maybe it has to do with being responsible for a family, I don’t know.

Concern over the direction things were headed (thankfully) forced a very rude financial awakening in 2007 or so. We began trying to dig ourselves out of the mountain of debt we had piled up. Debt seemed to be of little concern when you work in an industry that at any given time you could jump ship at just about any time for a 20-30% bump in pay but those days were over and it was time to live like all the other grown ups and by 2010 we had made some pretty good progress…financially.

Hurricane Katrina hit just a few hundred miles down I-10 from us. We watched the devastation and the ensuing breakdown in societal structures on the news and, to some degree, in person as we volunteered locally to help those streaming in from New Orleans. Then came Ike and, while were were spared the worst, it made it very clear that we were not properly prepared. It wasn’t until 2010 that we finally decided to do something about it and made a conscious decision to be more prepared.

At that point we began researching and studying. To be honest, we felt pretty silly and embarrassed at first. We thought we were the only ones around here thinking along these lines. We worried that we had become one of those crazy couples the media loves to ridicule. As time went by we found that we were not as far out or as alone out in left field as we thought. In fact, just this weekend we found three members of our Sunday school class were actively involved in some degree of preparedness or another. Counting us, that’s about 50%.

Our first priorities were pretty simple and basic and revolved around being prepared for another hurricane or a similar natural disaster. Food, water, supplies, and fuel for 3 days was our first goal. Later we expanded that to seven days and then fourteen. Reaching those goals were fairly easily accomplished and , with a few exceptions like a generator that took some time save for, fairly quickly achieved as well.

Over the last eight years we became increasingly worried about a different set of disasters. As the national debt soared and the economy slumped the government seemed intent on fanning the flames of division within the US. They also seemed fairly hellbent on taking away the right and the tools required to defend ourselves. Being prepared for financial and societal upheaval became almost as important as being ready for the next hurricane. Making sure we had the firearms and ammunition on hand should become unavailable was a pretty high priority especially as runs on guns and ammo have been pretty much the norm for the last eight years.

Back in November something changed. The expected election result did not happen. The Whitehouse would not be occupied by someone who seemed intent of driving the nation to civil war. Although I was fully expecting some sort of last minute trickery, the inauguration also happened. For a few weeks I have felt that things might be OK; that maybe we could change the trajectory we have been on.

Sadly, I think I was just on a brief, mental vacation.

Hurricanes will still hit the coast. Several more major cities around the nation, including the one I live closest to are heading for bankruptcy. There is no easy or short term fix for the US national debt or the Social Security shortfall. The external threats to the US are not going away anytime soon. Most concerning, the division within the nation is not getting better, if anything it is worsening. As the previous administration marginalized and angered those who hold traditional American values the current administration seems to be doing exactly the same to those who don’t. While physical infrastructure may be built, bridges between the various groups within the US will not. We’re still headed down the same path. The timeline might change a little (one direction or another) but we’re still headed towards a dark time in this country.

That is what I am preparing for.

I don’t claim to know exactly how dark that time will be; Great Depression dark, Civil War dark, Balkan wars dark, Mad Max dark (not sure if that is actually much different), or full on post apocalyptic mutant zombie biker dark.

That’s a bit of a problem when it comes to planning and preparedness.

Without the gift of prophesy, I’ll just have to make some assumptions and plan for those as best I can. Over the next few weeks I plan to spend some time thinking about those assumptions and making plans based on them. My goal is to share that process here. I want to do that for three reasons. First, to get feedback on what I might be missing or if I am way off base on anything. Second, to share what I am doing so that it might help others determine their own set of assumptions and plans.

 

Random Shots

Random links to various news stories and blog posts that caught my attention this week:

Social Security Running Dry…Still – The Social Security and Medicare Annual Report was released recently and the numbers still don’t look good. The disability fund will run dry by 2023 (7 years from now). The Medicare fund will follow five years after that in 2028 and the old-age fund will run out in 2035 (19 years from now) just a few years after we will probably retire, if such a thing will even be possible at that point.

Obama Pushes For Waiver On Killing Bald Eagles – We can’t have that nasty coal, oil or gas making the planet uninhabitable but the Obama administration is pushing for waivers that would exempt wind farms from damages or penalties resulting from killing protected birds such as the bald eagle…that’s very “green” of them, I guess.

What To Do When It All Falls Apart – Thoughtfully Prepping posted an interesting and thought provoking article on what to do when disaster strikes. Some would say you should run and some would suggest hunkering down. TP says you should stop and think first.

Islamic State Murders Christian Priest In Egypt – Christians, especially Coptic Christians, make up around 10% of the population of Egypt. Despite decades of persecution their faith remains strong. This week ISIS targeted and murdered the leader of one of these communities. Maybe Egypt should push for stronger gun controls laws…oh wait, they already did.

Prosecutor Denies Gang Rape Of Five Year Old Girl – The prosecutor, you know the person in the courtroom who should be trying to convict the bad guys, defended the three boys accused of the crime. It was NOT a gang rape. Nope, only one of the boys actually touched the girl, the other two only helped. Syrian refugees? Nope, one was from Sudan, another from Iraq and no statement on the nationality of the third nor was their immigration status available to the the prosecutor or police in the case (!?). On another note Federal officials have threatened anyone sharing incorrect information about this case with prosecution so hopefully, I go this right.

God bless and have a great weekend!