The Little Book of Bulletproof Investing: Do's and Don'ts to Protect Your Financial Life

Chapter 12. Can You Still Retire Comfortably?: Retirement Was Overrated, Anyway

Imagine that you switched on CNN to learn that a terrible Katrina-like hurricane was about to hit your city. Obviously, you would take every measure imaginable to make sure that you and your family would be safe and dry and out of harm's way.

We are here to deliver exactly such a warning. It is not a hurricane, but it is an event of such devastation that you had better keep a weather eye on it just the same. We are talking about the coming of old age. Chances are you are financially underprepared.

We have 77 million Baby Boomers rushing toward retirement. Few of them have made meaningful provision for it. About 25 percent have pension plans that should help. A few percent are millionaires. In the middle, there is a terrifying drought. The average financial savings of the Baby Boomers are far less than $50,000 per family, not counting what little equity remains in their houses. Roughly 40 percent have no savings at all.

Social Security is not a large amount for most people. Moreover, its future is uncertain. The nation is tapped out, deficitwise. The government cannot just write a check to make everything all right. That check would have to come from an ever-smaller pool of workers relative to the number of retirees. By creating massive entitlements designed to eliminate certain risks at the individual level, the government has paradoxically created gigantic new risks at a system-wide level.

Meanwhile, we ...