The economy is tough for everyone right now, but it is especially difficult for the Baby Boomer Generation looking to retire soon. According to a recent article in the Wall St. Journal: “As of the first quarter of 2010, net household assets (homes, 401(k) plans, pension assets and other investments) minus debts stood at $54.6 trillion, down 18% from the end of 2007. That’s an average of about $171,000 per person, much of which is concentrated in the hands of the wealthiest.”
While banks, home buyers, and bond issuers are all benefiting as the short-term interest rates near zero percent, many of the 80 million Baby Boomers looking to retire in the next ten years are watching their net worth drop like a rock. If current conditions persist, nearly three in five baby boomers will be at risk of running short of money in retirement.
Low yields present retirees with a difficult choice: Accept the lower income offered by safer bonds or take the risk of gambling in the stock market for a potentially higher return.
What are the Baby Boomers options if looking to pull out of the market? What other retirement savings options are available that yield a positive return with minimal risk? Savings accounts, CDs, money markets, and Treasury Bills are popular because Americans understand how this process works and these accounts are protected by the government and offer a positive interest rate. While the risk is very low, however, the interest rates are equally low. 7-10 year Treasury Bonds are only offering a 2.5% yield. Most short term interest rates are under 2%. No one can grow their retirement accounts with a 2% interest rate. In fact, it would take 36 years for someone to double their initial investment at a 2% interest rate! These low returns is a big reason why people stick in the stock market.
Why not continue in the stock market? Recently, CNBC aired a story about the future of the stock market. The conclusion was that based on studying charts and past trends, unemployment and leading indicators, the Dow will likely drop to 5,000 in the next two to two-and-a-half years.
Suddenly, 2% growth looks better!
Of course, this projected drop in the stock market is just speculation, but the speculation aspect is part of the problem. People are tired of taking risks and gambling in the stock market. Investors want to invest in a retirement vehicle that will show a positive growth from now until retirement.
What if you could combine the safety of a bank account or Treasury bond with the high yield return of the stock market?
The answer for many investors is the Safe Savings Account. A Safe Savings Account is a product designed to offer Americans the safety of a bank account with a higher, guaranteed interest rate backed by hard assets.
A Safe Savings Account operates similar to a CD in that you invest money and earn a guaranteed compound interest rate. Instead of offering protection in the form of FDIC insurance, thought, the Safe Savings Account is then back by a hard asset, thus guaranteeing your investment. Since backed by an asset, the Company offering the Safe Savings Account can afford to offer a higher, more competitive interest rate than banks or TBills or bonds without all the volatility and loss potential of the stock market! How else can you accurately plan for retirement unless you can calculate the future value of your retirement account to the dollar? Anything else is just financial guessing; and in these uncertain times, taking chances just doesn’t make any sense.
The Warr Investment Group offers a Safe Savings Account with a Guaranteed 8% interest rate. While the tumultuous market will have it’s ups and down, you can rest assured that your investment will double every 8.67 years. How else can you plan for retirement unless you know how much money you’re going to make? For more information on the Warr Investment Groups’ Safe Savings Account, please visit http://www.JimWarr.com.