The Great Retirement Con

The Origins Of The Retirement Plan

Back during the Revolutionary War, the Continental Congress promised a monthly lifetime income to soldiers who fought and survived the conflict. This guaranteed income stream, called a "pension", was again offered to soldiers in the Civil War and every American war since.

Since then, similar pension promises funded from public coffers expanded to cover retirees from other branches of government. States and cities followed suit -- extending pensions to all sorts of municipal workers ranging from policemen to politicians, teachers to trash collectors.

A pension is what's referred to as a defined benefit plan. The payout promised a worker upon retirement is guaranteed up front according to a formula, typically dependent on salary size and years of employment.

Understandably, workers appreciated the security and dependability offered by pensions. So, as a means to attract skilled talent, the private sector started offering them, too. 

The first corporate pension was offered by the American Express Company in 1875. By the 1960s, half of all employees in the private sector were covered by a pension plan.

Off-loading Of Retirement Risk By Corporations

Once pensions had become commonplace, they were much less effective as an incentive to lure top talent. They started to feel like burdensome cost centers to companies.

As America's corporations grew and their veteran employees started hitting retirement age, the amount of funding required to meet current and future pension funding obligations became huge. And it kept growing. Remember, the Baby Boomer generation, the largest ever by far in US history, was just entering the workforce by the 1960s.

Companies were eager to get this expanding liability off of their backs. And the more poorly-capitalized firms started defaulting on their pensions, stiffing those who had loyally worked for them.

So, it's little surprise that the 1970s and '80s saw the introduction of personal retirement savings plans. The Individual Retirement Arrangement (IRA) was formed by the Employee Retirement Income Security Act (ERISA) in 1974. And the first 401k plan was created in 1980.

These savings vehicles are defined contribution plans. The future payout of the plan is variable (i.e., unknown today), and will be largely a function of how much of their income the worker directs into the fund over their career, as well as the market return on the fund's investments.

Touted as a revolutionary improvement for the worker, these plans promised to give the individual power over his/her own financial destiny. No longer would it be dictated by their employer.

Your company doesn't offer a pension? No worries: open an IRA and create your own personal pension fund.

Afraid your employer might mismanage your pension fund? A 401k removes that risk. You decide how your retirement money is invested.

Want to retire sooner? Just increase the percent of your annual income contributions.

All this sounded pretty good to workers. But it sounded GREAT to their employers.

Why? Because it transferred the burden of retirement funding away from the company and onto its employees. It allowed for the removal of a massive and fast-growing liability off of the corporate balance sheet, and materially improved the outlook for future earnings and cash flow.

As you would expect given this, corporate America moved swiftly over the next several decades to cap pension participation and transition to defined contribution plans.

The table below shows how vigorously pensions (green) have disappeared since the introduction of IRAs and 401ks (red):

(Source)

So, to recap: 40 years ago, a grand experiment was embarked upon. One that promised US workers: Using these new defined contribution vehicles, you'll be better off when you reach retirement age.

Which raises a simple but very important question: How have things worked out?

The Ugly Aftermath

America The Broke

Well, things haven't worked out too well.

Three decades later, what we're realizing is that this shift from dedicated-contribution pension plans to voluntary private savings was a grand experiment with no assurances. Corporations definitely benefited, as they could redeploy capital to expansion or bottom line profits. But employees? The data certainly seems to show that the experiment did not take human nature into account enough – specifically, the fact that just because people have the option to save money for later use doesn't mean that they actually will.

First off, not every American worker (by far) is offered a 401k or similar retirement plan through work. But of those that are, 21% choose not to participate (source).

As a result, 1 in 4 of those aged 45-64 and 22% of those 65+ have $0 in retirement savings (source). Forty-nine percent of American adults of all ages aren't saving anything for retirement.

In 2016, the Economic Policy Institute published an excellent chartbook titled The State Of American Retirement (for those inclined to review the full set of charts on their website, it's well worth the time). The EPI's main conclusion from their analysis is that the switchover of the US workforce from defined-benefit pension plans to self-directed retirement savings vehicles (e..g, 401Ks and IRAs) has resulted in a sizeable drop in retirement preparedness. Retirement wealth has not grown fast enough to keep pace with our aging population.

The stats illustrated by the EPI's charts are frightening on a mean, or average, level. For instance, for all workers 32-61, the average amount saved for retirement is less than $100,000. That's not much to live on in the last decades of your twilight years. And that average savings is actually lower than it was back in 2007, showing that households have still yet to fully recover the wealth lost during the Great Recession.

But mean numbers are skewed by the outliers. In this case, the multi-$million households are bringing up the average pretty dramatically, making things look better than they really are. It's when we look at the median figures that things get truly scary:

Nearly half of families have no retirement account savings at all. That makes median (50th percentile) values low for all age groups, ranging from $480 for families in their mid-30s to $17,000 for families approaching retirement in 2013. For most age groups, median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.

(Source)

The 50th percentile household aged 56-61 has only $17,000 to retire on. That's dangerously close to the Federal poverty level income for a family of two for just a single year.

Most planners advise saving enough before retirement to maintain annual living expenses at about 70-80% of what they were during one's income-earning years. Medicare out-of-pocket costs alone are expected to be between $240,000 and $430,000 over retirement for a 65-year-old couple retiring today.

The gap between retirement savings and living costs in one's later years is pretty staggering:

  • Nearly 83% of retired households have less saved than Medicare costs alone will consume.
  • One-third of retired households are entirely dependent on Social Security. On average, that's only $1,230 per month a hard income to live on. (source)
  • 34 percent of older Americans depend on credit cards to pay for basic living expenses such as mortgage payments, groceries, and utilities. (source

As for Medicare, the out-of-pocket costs could easily soar over retirement. The Wall Street Journal reports that the current estimate of Medicare's unfunded liability now tops $42 Trillion. Such a mind-boggling gap makes it highly likely that current retirees will not receive all of the entitlements they are being promised.

And the denial being shown by baby boomers entering retirement is frightening. Many simply plan to work longer before retiring, with a growing percentage saying they plan to work "forever". 

But the data shows that declining health gives older Americans no choice but to leave the work force eventually, whether they want to or not. Years of surveys by the Employment Benefit Research Institute show that fully half of current retirees had to leave the work force sooner than desired due to health problems, disability, or layoffs.

Add to this the nefarious impact of the Federal Reserve's prolonged 0% interest rate policy, which has made it extremely hard for retirees with fixed-income investments to generate a meaningful income from them.

The number of Americans aged 65 years and older is projected to more than double in the next 40 years:

Will the remaining body of active workers be able to support this tsunami of underfunded seniors? Don't bet on it.

Especially since their retirement savings prospects are even more dim. With long-stagnant real wages and punishing price inflation in the cost of living, Generation X and Millennials are hard-pressed to put money away for their twilight years:

(Source)

Public Pensions: Broken Promises

And for those "lucky" folks expecting to enjoy a public pension, there's a lot of uncertainty as to whether they're going to receive all they've been promised.

Due to underfunded contributions, years of portfolio under-performance due to the Federal Reserve's 0% interest rate policy, poor fund management, and other reasons, many of the federal and state pensions are woefully under-captialized. The below chart from former Dallas Fed advisor Danielle DiMartino-Booth shows how the total sum of unfunded public pension obligations exploded from $292 billion in 2007 to $1.9 trillion by the end of 2016:

(Source)

And the daily headlines of failing state and local pension funds (Illinois, Kentucky, New JerseyDallas, Providence -- to name but a few) show that the problem is metastasizing across the nation at an accelerating rate.

Affording Your Future

The bottom line when it comes to retirement is that you're on your own. The vehicles and the promises you've been given are proving woefully insufficient to fund the "retirement" dream you've been sold your whole life.

That's the bad news.

But the good news is that the dream is still attainable. There are strategies and behaviors that, if adopted now, will make it much more likely for you to be able to afford to retire -- and in a way you can enjoy.

In Part 2: Success Strategies For Retirement, we detail out these best practices for a solvent retirement, including providing 14 specific action steps you can start taking right now in your life that will materially improve your odds of enjoying your later years with grace.

For far too many Americans, "retirement" will remain a perpetual myth. Don't let that happen to you.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

Trump branded a tyrant, but did Obama outdo him on deportations?

Genaro Molina / Contributor | Getty Images

MSNBC and CNN want you to think the president is a new Hitler launching another Holocaust. But the actual deportation numbers are nowhere near what they claim.

Former MSNBC host Chris Matthews, in an interview with CNN’s Jim Acosta, compared Trump’s immigration policies to Adolf Hitler’s Holocaust. He claimed that Hitler didn’t bother with German law — he just hauled people off to death camps in Poland and Hungary. Apparently, that’s what Trump is doing now by deporting MS-13 gang members to El Salvador.

Symone Sanders took it a step further. The MSNBC host suggested that deporting gang-affiliated noncitizens is simply the first step toward deporting black Americans. I’ll wait while you try to do that math.

The debate is about control — weaponizing the courts, twisting language, and using moral panic to silence dissent.

Media mouthpieces like Sanders and Matthews are just the latest examples of the left’s Pavlovian tribalism when it comes to Trump and immigration. Just say the word “Trump,” and people froth at the mouth before they even hear the sentence. While the media cries “Hitler,” the numbers say otherwise. And numbers don’t lie — the narrative does.

Numbers don’t lie

The real “deporter in chief” isn’t Trump. It was President Bill Clinton, who sent back 12.3 million people during his presidency — 11.4 million returns and nearly 900,000 formal removals. President George W. Bush, likewise, presided over 10.3 million deportations — 8.3 million returns and two million removals. Even President Barack Obama, the progressive darling, oversaw 5.5 million deportations, including more than three million formal removals.

So how does Donald Trump stack up? Between 2017 and 2021, Trump deported somewhere between 1.5 million and two million people — dramatically fewer than Obama, Bush, or Clinton. In his current term so far, Trump has deported between 100,000 and 138,000 people. Yes, that’s assertive for a first term — but it's still fewer than Biden was deporting toward the end of his presidency.

The numbers simply don’t support the hysteria.

Who's the “dictator” here? Trump is deporting fewer people, with more legal oversight, and still being compared to history’s most reviled tyrant. Apparently, sending MS-13 gang members — violent criminals — back to their country of origin is now equivalent to genocide.

It’s not about immigration

This debate stopped being about immigration a long time ago. It’s now about control — about weaponizing the courts, twisting language, and using moral panic to silence dissent. It’s about turning Donald Trump into the villain of every story, facts be damned.

If the numbers mattered, we’d be having a very different national conversation. We’d be asking why Bill Clinton deported six times as many people as Trump and never got labeled a fascist. We’d be questioning why Barack Obama’s record-setting removals didn’t spark cries of ethnic cleansing. And we’d be wondering why Trump, whose enforcement was relatively modest by comparison, triggered lawsuits, media hysteria, and endless Nazi analogies.

But facts don’t drive this narrative. The villain does. And in this script, Trump plays the villain — even when he does far less than the so-called heroes who came before him.

This article originally appeared on TheBlaze.com.

Exposed: America’s ancient power grid is a national security disaster

Allan Tannenbaum / Contributor | Getty Images

If America wants to remain a global leader in the coming decades, we need more energy fast.

It's no secret that Glenn is an advocate for the safe and ethical use of AI, not because he wants it, but because he knows it’s coming whether we like it or not. Our only option is to shape AI on our terms, not those of our adversaries. America has to win the AI Race if we want to maintain our stability and security, and to do that, we need more energy.

AI demands dozens—if not hundreds—of new server farms, each requiring vast amounts of electricity. The problem is, America lacks the power plants to generate the required electricity, nor do we have a power grid capable of handling the added load. We must overcome these hurdles quickly to outpace China and other foreign competitors.

Outdated Power Grid

Spencer Platt / Staff | Getty Images

Our power grid is ancient, slowly buckling under the stress of our modern machines. AAI’s energy demands could collapse it without a major upgrade. The last significant overhaul occurred under FDR nearly a century ago, when he connected rural America to electricity. Since then, we’ve patched the system piecemeal, but it’s still the same grid from the 1930s. Over 70 percent of the powerlines are 30 years old or older, and circuit breakers and other vital components are in similar condition. Most people wouldn't trust a dishwasher that was 30 years old, and yet much of our grid relies on technology from the era of VHS tapes.

Upgrading the grid would prevent cascading failures, rolling blackouts, and even EMP attacks. It would also enable new AI server farms while ensuring reliable power for all.

A Need for Energy

JONATHAN NACKSTRAND / Stringer | Getty Images

Earlier this month, former Google CEO Eric Schmidt appeared before Congress as part of an AI panel and claimed that by 2030, the U.S. will need to add 96 gigawatts to our national power production to meet AI-driven demand. While some experts question this figure, the message is clear: We must rapidly expand power production. But where will this energy come from?

As much as eco nuts would love to power the world with sunshine and rainbows, we need a much more reliable and significantly more efficient power source if we want to meet our electricity goals. Nuclear power—efficient, powerful, and clean—is the answer. It’s time to shed outdated fears of atomic energy and embrace the superior electricity source. Building and maintaining new nuclear plants, along with upgraded infrastructure, would create thousands of high-paying American jobs. Nuclear energy will fuel AI, boost the economy, and modernize America’s decaying infrastructure.

A Bold Step into the Future

ANDREW CABALLERO-REYNOLDS / Contributor | Getty Images

This is President Trump’s chance to leave a historic mark on America, restoring our role as global leaders and innovators. Just as FDR’s power grid and plants made America the dominant force of the 20th century, Trump could upgrade our infrastructure to secure dominance in the 21st century. Visionary leadership must cut red tape and spark excitement in the industry. This is how Trump can make America great again.

POLL: Did astronomers discover PROOF of alien life?

Print Collector / Contributor | Getty Images

Are we alone in the universe?

It's no secret that Glenn keeps one eye on the cosmos, searching for any signs of ET. Late last week, a team of astronomers at the University of Cambridge made an exciting discovery that could change how we view the universe. The astronomers were monitoring a distant planet, K2-18b, when the James Webb Space Telescope detected dimethyl sulfide and dimethyl disulfide, two atmospheric gases believed only to be generated by living organisms. The planet, which is just over two and a half times larger than Earth, orbits within the "habitable zone" of its star, meaning the presence of liquid water on its surface is possible, further supporting the possibility that life exists on this distant world.

Unfortunately, humans won't be able to visit K2-18b to see for ourselves anytime soon, as the planet is about 124 light-years from Earth. This means that even if we had rockets that could travel at the speed of light, it would still take 124 years to reach the potentially verdant planet. Even if humans made the long trek to K2-18b, they would be faced with an even more intense challenge upon arrival: Gravity. Assuming K2-18b has a similar density to Earth, its increased size would also mean it would have increased gravity, two and a half times as much gravity, to be exact. This would make it very difficult, if not impossible, for humans to live or explore the surface without serious technological support. But who knows, give Elon Musk and SpaceX a few years, and we might be ready to seek out new life (and maybe even new civilizations).

But Glenn wants to know what you think. Could K2-18b harbor life on its distant surface? Could alien astronomers be peering back at us from across the cosmos? Would you be willing to boldly go where no man has gone before? Let us know in the poll below:

Could there be life on K2-18b?

Could there be an alien civilization thriving on K2-18b?

Will humans develop the technology to one day explore distant worlds?

Would you sign up for a trip to an alien world?

Is K2-18b just another cold rock in space?

Our children are sick, and Big Pharma claims to be the cure, but is RFK Jr. closer to proving they are the disease?

For years, neurological disorders in our children have been on the rise. One in nine children in the U.S. has been diagnosed with ADHD, and between 2016 and 2022, more than one million kids were told they suffer from the disorder. Similarly, autism diagnoses have increased by 175 percent over the past decade. RFK Jr. pledged to investigate the rising rates of neurological disorders as Secretary of Health and Human Services, and this week, he announced a major initiative.

Earlier this week, RFK Jr. announced that the HHS has embarked on a massive testing and research effort to uncover the root causes of autism and the sharp spike in recent diagnoses. The HHS Secretary vowed that the results will be available by September of this year, leaving many skeptical about the study's rigor. Conversely, some speculate that the HHS may have unpublished studies revealing critical insights into these disorders, just waiting to see the light of day.

Glenn brought up a recent article by the Daily Wire referencing a New York Times piece in which experts questioned the legitimacy of ADHD diagnoses. Glenn agreed and suggested that people are just wired differently; they learn, work, and study differently, and the cookie-cutter, one-size-fits-all school system simply fails to accommodate everyone.

New York Times' ADHD Admission

Bloomberg / Contributor | Getty Images

Earlier this week, the New York Times published an article that made a shocking admission: there are no concrete biological markers for ADHD. The clinical definition of ADHD is no longer supported by the evidence, and there are no physical, genetic, or chemical identifiers for the disorder, nor is there any real way to test for it. The paper also admitted that people diagnosed with ADHD would suddenly find that they no longer had any symptoms after a change of environment, profession, or field of study. This suggests that "ADHD" might simply be a matter of interests and skills, not a chronic brain sickness.

The most horrifying implication of this admission is that millions of people, including children, have been prescribed heavy mind-altering drugs for years for a disorder that lacks real evidence of its very existence. These drugs are serious business and include products such as Adderall, Ritalin, and Desoxyn. All of these drugs are considered "Schedule II," which is a drug classification that puts them on the same level as cocaine, PCP, and fentanyl. Notably, Desoxyn is chemically identical to methamphetamine, differing only in its production in regulated laboratories rather than illegal settings.

Worse yet, studies show that these medications, like Desoxyn, often provide no long-term benefits. Testing demonstrated that in the short term, there were some positive effects, but after 36 months, there was no discernible difference in symptoms between people who were medicated and those who were not. For decades, we have been giving our children hardcore drugs with no evidence of them working or even that the disorder exists.

RFK Jr's Autism Study

Alex Wong / Staff | Getty Images

Autism rates are on the rise, and RFK Jr. is going to get to the bottom of it. In the year 2000, approximately one in 150 children was diagnosed with autism, but only 20 years later, the rate had increased to one in 36. While some claim that this is simply due to more accurate testing, RFK Jr. doesn't buy it and is determined to discover what is the underlying cause. He is an outspoken critic of vaccines, asserting that the true scope of their side effects has been buried by greed and corruption to sell more vaccines.

RFK Jr. doesn't plan on stopping at vaccines. Similar to ADHD, RFK Jr. suspects other environmental factors could increase of autism or exacerbate symptoms. Factors like diet, water quality, air pollution, and parenting approaches are all under investigation. It's time to bring clarity to the neurological disorders that plague our nation, cut through the corruption, and reveal the healing truth.

Neurological Intervention

WIN MCNAMEE / Contributor | Getty Images

Big Pharma has been all too happy to sit back and watch as the rate of neurological disorders climbs, adding to the ever-growing list of permanent patients who are led to believe that their only choice is to shell out endless money for treatments, prescriptions, and doctor visits. Rather than encouraging lifestyle changes to improve our well-being, they push ongoing medication and costly treatments.

All RFK Jr. is doing is asking questions, and yet the backlash from the "experts" is so immense that one can't help but wonder what they could be hiding. Both Glenn and RFK Jr. have their suspicions of Big Pharma, and the upcoming HHS study might be one of the most important steps to making America healthy again.