Irrational Exuberance

Regardless of your political persuasion it’s hard to argue that life isn’t improving these days for most Americans.

The recently passed Tax Cuts and Jobs Act plus the administration’s deregulation initiatives have combined to help register the nation’s lowest unemployment rate in 18 years. Black unemployment currently stands at the lowest rate ever recorded. Wages are increasing, and business and consumer confidence are soaring.

According to Americans for Tax Reform, 587 companies have announced “pay raises, bonuses, 401(k) match increases, expansions, and utility rate reductions,” as a result of the tax cuts. And the House of Representatives Committee of Ways and Means states most median-income families of four will save more than $2,000 in taxes starting this year.

Pretty heady stuff, right? So what does all of this positive news mean to you if you’re nearing retirement with inadequate savings?

Absolutely nothing.

Well, that’s not exactly true. If the stock market continues to climb you stand to earn a higher rate of return on those inadequate savings. And maybe the improved labor market means you can continue to work longer than you ever intended in spite of the obstacles we recently wrote about.

Yes, the U.S. is experiencing an economic resurgence but if you’re over 55 and your retirement plans aren’t pretty well locked in, we’re sorry to report that there’s not enough time on the clock for you to mount your own personal comeback. You face the bleak prospect of continuing to work as long as you possibly can in order to save enough to get you through the final years that you’re too old, too tired, and maybe too ill to even enjoy.

Unless you think of something else.

Do you really want to continue to work long past the time you dreamed of retiring? Scraping by on a spartan budget with no allowance for fun just so you can cobble enough money together to pay your mounting medical bills?

If you’re happy with that plan then go for it. We stood at that same crossroads when our financial world collapsed and chose a different path. There was no way after working hard our entire adult lives we were going to settle for a substandard retirement. By moving abroad we put those monetary challenges behind us and have for years now enjoyed an abundant lifestyle beyond our dreams.

We urge you not to fall prey to misplaced enthusiasm over the improved state of our nation’s economic affairs. Your retirement situation has no room for complacency and needs your continued attention.

Decide the path you will take: do nothing and reap the consequences–work forever–or do as we did and come up with a different and better solution.

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