Lazy Gopher Pachyderm

If you’re under 50 the most likely way you’re going to have a comfortable retirement is through long-term investment in the equity markets. The reason is simple; that’s all there is anymore. Other sources of retirement income fall short or are disappearing:

Social Security was never meant to be more than a supplement to personal savings, and an actuarial fraud at that. Expect reduced benefits and/or higher taxes sometime in the future.

‘Defined benefit’ plans offered by employers were unsustainable and are gone. These were the plans that promised a pension check based on length of employment and salary.

Of course you could make a killing in real estate or build some other form of highly successful business. But these are less common and high risk.

That leaves ‘Defined Contribution’ plans; individual accounts where benefits are based solely on the amount contributed to the account, plus or minus income, gains, expenses and losses. These take the form of work-related plans like 401(k) or KEOGH plans, and IRAs. The investment of choice is the stock market, which historically provides the best long term returns.

In other words, healthy growing retirement accounts require healthy growing stock markets.

Enter the Democrats. Over the years they have tried to introduce regulations that make stock markets less efficient and strangle the corporate growth that is required to fund America’s retirements. We’ll start by examining Sarbanes-Oxley in the next post.