Avoid Destroying Your Retirement Dreams

Are We About to Hit America's Final Unwind? America is heading towards an unprecedented economic crisis … and no one is talking about it. On December 23, 2013, a financial event is coming that could wipe out markets overnight. To find out how you can shelter yourself from this coming storm, click here for our urgent video report. Today's Risk for Workers Isn't Volatile Stocks... It's Missing Out on Future Growth By Jeff Opdyke, Editor of The Sovereign Individual Dear Sovereign Investor Subscriber, Last Tuesday, I wrote that if you're retired and you've pulled your money out of the market and stuffed it into bonds, cash or Treasury notes for safety … well, that's a mistake. The real risk today isn't losing money to a market upheaval. Rather, the real risk is not having enough income to afford the lifestyle you want in retirement. For retirees, that's an immediate risk, since they're not earning meaningful income anywhere in cash or bonds. For those of us in our 30s through mid-60s who are actively working, the risk to us is not having our money doing all it can to grow our portfolio in preparation for retirement. Advertisement A Revolutionary New Way to Buy Gold & Silver We believe so strongly in gold's future that we've joined forces with a new group called the Hard Asset Alliance. Through a new trading platform, the Alliance provides the most-transparent, safe and convenient way to buy gold, silver and other precious metals at competitive prices - from the convenience of your computer. Better still, the Alliance even gives you the option to hold your metals overseas – in Zurich, London, Sydney or Singapore – if you'd rather have them outside the purview of the U.S. To learn more, click here. If you're avoiding stocks right now, you're missing out. Because today it's all about the growth you need in order to insure that your nest egg can you support your lifestyle in later years. Growth: The Key to a Secure Retirement Let's wrap some real numbers around this idea of risk I'm talking about, so that you can get a real feeling for the concept. This isn't just me yapping about stocks for no reason. There's a real dichotomy here: Protect every penny you have against possible loss in the stock market and you risk not having nearly enough pennies later in life when it matters most. We'll assume the average American working couple is our target. They're both 45 years old. One earns $75,000 a year; the other, $50,000. They're each saving 10% of their income, and so far they've both stashed about $75,000 in their individual retirement accounts. Because they are so antsy about the stock market, those retirement accounts are heavily invested in bonds – 90% of the cash in bonds funds and just 10% in stocks. They have 22 years until they reach full-retirement age at 67. At that point, they will generate an estimated $3,700 a month from their combined Social Security payments. The retirement portfolios, meanwhile, will kick in about $2,100 a month, for a grand total monthly income of $5,800. But there's a significant problem. Our average American working couple faces 22 years of inflation before they retire. To live the same lifestyle they now live on a $125,000 pre-tax income will require, at age 67, a monthly income stream of more than $7,800. As a couple, they seem to be doing everything right. They're living within their means. They're saving 10% of their salary. They're investing conservatively to protect their wealth and insure they have a substantial cushion to live on in retirement. And yet, their retirement lifestyle promises to be far more subdued than they'd imagined because the income they need is 35% more than the income they'll actually bring in. They will have to sharply cut spending to make ends meet at a time of life when they should be celebrating the end of a successful career. The entire reason this happens stems from the couple's fears of misplaced risk. Their risk isn't what the stock market does today, tomorrow, next year or five years from now. Their true risk is failing to meet the goals they've set for themselves two decades out. Bonds will never provide the fuel a portfolio needs to insure growth – and that's especially true in an era of near-zero interest rates. But our couple is so freaked out by the stock market's neurosis these days that they prefer the safety of bonds to the supposed risk of stocks … never realizing that they're destroying their dreams for retirement. And that – destroying dreams two decades out – is a far, far bigger risk than whether the S&P is up, down or sideways in the short- and medium-term … because over the long-term, the markets have always gone up. Your Future Isn't Tomorrow; It's in Decades – Invest Accordingly I realize just how hard it can be to make investment decisions when you feel paralyzed by all that has happened on Wall Street going back to the tech crash of 2000-01. But go back to the last paragraph and reread that last phrase – over the long-term, the markets have always gone up. Going back to 1929, when Standard & Poor's started tracking the stock market, there's not a single rolling, 20-year period in which the market is down. There are clearly some periods when then market caused great amounts of stress and panic in the short-term. But to be a successful investor, you have to separate your immediate emotions from your long-term goals. Emotions – fear in down markets, greed in up markets – will always get in the way of the prudent decisions required when managing your portfolio. And the thing is, these days you absolutely have to be a successful investor because only you are in control of your future. The government has no vested interest in your retirement, and employers have ditched pension plans for self-directed 401(k) plans. So how you live in your golden years is entirely your call. But here's the good news: Investing prudently in an IRA is not difficult. You just have to be committed to the long haul and not be distracted by the noise that happens every day in the stock market. To that end, I am actively working on a way to make managing your IRA simple for Sovereign Investor readers. The idea is to simplify the process so that anyone can easily and effectively manage their money, and feel confident that they've invested prudently and properly for the future. When it's ready to go, I'll let you know. In the meantime, just focus on your real risk … your future lifestyle, not the volatility in your portfolio today. Until next time, stay Sovereign… Jeff D. Opdyke P.S. The long-term outlook for the dollar will also have a huge impact on your retirement funds, and right now, it isn't looking good. While the dollar is enjoying some temporary strength from Europe's troubles, once those pass, it will inevitably resume its 30-year decline. To make sure the weakening greenback doesn't eat away at your retirement nest egg, we're holding our Global Currency Expo this spring to show you how to break free of a future tied to the dollar. To find out how you can reserve a spot today, click here. Related Reading: Value, Growth and Income in One Single Play When Picking the Wrong Stock Means a Golden Opportunity One Chart Shows the Dollar's Sad Future The "Timing Indicator" You Need to Know RECENT ARTICLES 8/24/2012 Finding Explosive Growth in Tomorrow's Multinationals Dversify your porftfolio with explosure to multinational companies. But the real growth comes from investing in baby multinationals. 8/23/2012 Avoiding the D.C. Finger Trap The Federal Reserve is intuding into our lives with regulations and policies. So it's time to invest in companies with high yields. 8/22/2012 As Swiss Banks Close Their Doors, Look to Uruguay Since the Patriot Act has destroyed our financial privacy, it's time to keep your wealth safe in banks in Uruguay, like Lloyds TSB. 8/21/2012 Don't Fear the Stock Market…Fear Not Meeting Your Real Goals When thinking about retirement, it's important to invest your money in stocks with safe, stable yields. Don't risk not having enough income. STATE OF OUR WORLD National Debt Clock: $15,983,728,835,496 BECOME A MEMBER For more valuable information from The Sovereign Society on how to protect and grow your wealth, become a member today. JOIN NOW SPECIAL REPORTS Jeff Opdyke 2012: The Year of Yield Andy Hecht Metals More Precious and Profitable than Gold Bob Bauman How to Escape America, and Where to Go STAY INFORMED Whitelist Us Follow Us on Twitter Like Us on Facebook   Privacy Policy The Sovereign Investor 98 S.E. 6th Ave, Suite 2 Delray Beach, FL 33483 The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: http://sovereign-investor.com/contact-us/ Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. 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