Essay about The Retirement Era Of Retirement

Essay about The Retirement Era Of Retirement

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I thought long and hard about writing this piece, its not a story that many investment advisors want to share. Its not a feel-good story.

Retirement is a relatively new idea, for most of mankind 's history, if you were alive you worked. Even the wealthy worked managing their estates. That all changed in 1881 when Otto von Bismarck, the conservative minister president of Prussia proposed government-run financial support for older members of society. It then took eight years for the German government to approve a plan which provided support for those who were over the age of 70. The life expectancy at that time was about 50.

By the 1920 's, a variety of American industries, from oil to railroads to banking, were promising their workers some sort of support in their later years. And certain municipal employees in bigger cities started receiving public pensions.

Most pension plans pegged the retirement age to 65, which had more to do with economics than health. When Social Security was passed in 1935, the official retirement age was 65, and life expectancy for American men was 58. The math worked.

As the post-war U.S. economy boomed, Americans started to live longer. By 1960, life expectancy was almost 70 years. All of a sudden healthy people were retiring in large numbers. For decades older Americans lived without working, so much so that we actually began to believe that we should be able to retire.

Today the average American 50 year old will live to 80, but that 's average, it will not be unusual to be healthy into your 90 's.

Retirement is a pretty cool idea, the thought of being able to enjoy 20, 30, or even 40 years without working is the societal equivalent of utopia. Unfortunately the math doesn 't work. It hasn 't wor...


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...e economy is stuck at no-growth or is contracting. In other words earnings are contracting and stock prices are flat to lower.

ZIRP and NIRP are quickly killing the idea of retirement.

Where We Stand:

In the last several weeks we 've seen most risk assets bounce rather strongly, and the riskier/junkier assets rally the most. Unfortunately this bounce has yet to shift any of our longer term indicators towards bullish territory, therefore it remains just a bounce in a bear market.

Here at Rockhaven we continue to be defensively positioned, and have recently added to our Gold holdings. Here are our current strategy weights:
The Focused Tactical Asset Allocation has 20% in U.S. Stocks, 10% in Gold, 25% in Bonds, and 45% in Cash.
The Balanced Tactical Asset Allocation has 14% in U.S. Stocks, 6% in Int 'l Stocks, and 36.5% in Cash.
The Equity portfolio has 40% in Cash.

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