Chapter 4: The 3-Legged Stool and Longevity

Andy Horner  •  11/21/2014  •  Feature Presentation

Video Transcript

Imagine if when the Baby Boomers were ready to drive, cars had become obsolete – or if owning a single-family residences had become an impossibility. That’s what it has been like for the Baby Boomers. When the time came for them to retire – the traditional model of retirement, enjoyed by their parents and their grandparents, is becoming obsolete. 

Past generations usually retired with a “3-Legged Stool” of a company-sponsored pension, a Social Security check, and personal savings. The effects of The Lost Decade combined with  a perfect storm of other factors have broken the 3-Legged Stool forever.

First, receiving retirement income as a benefit from your company is all but extinct. The percentage of workers covered by a traditional pension plan that pays a lifetime income, has been steadily declining over the past 25 years. 

Second, in 1945, there were 42 workers for every 1 retired. Now, it’s less than 3 to 1. With a ratio like that, where will the money come from to fund Social Security benefits? According to a recent government report, high energy prices and a slowly rebounding economy are shortening the life of the trust funds that support Social Security – as it stands now, it is predicted that funds will run out by 2033. If these funds are exhausted, the program would only receive enough in payroll taxes to pay partial benefits. Social Security is quickly becoming a shaky leg on which to base retirement income.

Although the market has almost tripled in value since March of 2009, many people still fear putting money into it, and instead, are They’re losing out by moving their investments to cash type accounts that earn little or even no interest. With performance like that, how will they grow their money? If their money doesn’t grow, and without a pension or Social Security check to rely on, how will they afford their retirement?

Their fear of the market and lack of financial education, could possibly cause them to have to put their dreams on hold, or possibly give up on them completely. These trends are collapsing the 3-legged American retirement system as we know it. 

With the irreversible disintegration of pensions and the unsustainable projections of Social Security, there’s a clear shift to personal responsibility when it comes to investment and retirement planning. People are actively – if not desperately – seeking ways to gain the best possibility of their money lasting as long as they do. Key word – "SEEKING." That means many have not yet found a plan or path. There are seemingly endless obstacles and issues to finding simple and efficient strategies to put your money to work for you. Without experienced guidance most are left overwhelmed by financial options and complexities. They're “SEEKING" answers that can help them manage their money and work towards a more sound financial future. They're "SEEKING" a balance between what they can spend now and what they must save for later.  

These have been, and still are difficult times for many. According to a recent Allianz survey of adults, when asked the question – "Which do you fear the most? Dying or outliving your money." – 2 out of 3 said, "Outliving my money."  People are more worried about going broke than dying!

Just like they were born within 18 years of each other, Baby Boomers will now attempt to retire within 18 years of each other. They control 70% of the nation's wealth. Yet, according to a recent study, almost 2 out of 3 don’t have a financial advisor, yet.

In this era of longevity, they’ll average another 25 years of life some even longer. The truth is, almost no one is truly prepared for the inevitability that lies ahead – their own longevity. You’d think having 25 additional years of life would be perceived as a gift instead of a threat. But for so many who are without a pension, without the promise of Social Security, and inadequate savings – living longer could mean suffering in hardship instead of enjoying their golden years.

The question you may be asking now is, “with these events and statistics, what hope of prosperity and comfort is there for this generation?”

The answer is the same one that emerges whenever an industry is turned upside down. The hope is INNOVATION. A new idea. A new set of rules. A break-through few could have imagined. 

In a moment, I’ll reveal how our INNOVATION is changing the financial industry and giving hope to Baby Boomers and the generations following them. You’ll see how hope, opportunity, and innovation are creating a new 3-legged-stool to get people back on track to the future of their dreams. And you’ll see how you can pursue your own dreams by giving them new hope.

(Sources included in the video above.)