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Financial advisor Ric Edelman (founder of Edelman Financial Services) was on Capitol Hill this summer with an urgent message for lawmakers: beware the retirement income crisis that will hit in 14 years. He was speaking at an event called “Planning for 75 at 25: Saving for Retirement and How Policy Affects You.” The event was held by the Funding Our Future Coalition, an organization launched by Edelman and the Bipartisan Policy Center in February.

His bottom line was this:

  • The country is facing an enormous challenge regarding Social Security and Medicare
  • Under current law—which was passed 35 years ago in 1983—Social Security retirement benefits will be cut 23 percent across the board starting in 2034. This cut will be for all retires equally, regardless of financial status.
  • This action will lead to millions of retirees facing an economic crisis, because more than half of today’s retirees rely on Social Security for more than half of their income.
  • Congress will raise taxes significantly in order to shore up cash reserves to avoid this from happening, creating a massive burden on younger workers.
  • Two-thirds of Americans aged 21 to 32 have nothing saved for retirement.

Edelman added that many Americans—including sitting members of Congress who came into office long after the law was passed—are unaware of this legislation.

Open a self-directed IRA and head away from a retirement crisis

As many savvy investors already know, saving for retirement with a self-directed IRA is one way to avoid the forecasted economic crisis during one’s retirement years. By building a more diverse portfolio with alternative assets, and by making all your own investment decisions, you’re in control of your future. Whether you include real estate, precious metals, private equity, commodities, or other nontraditional investments allowed in a self-directed IRA, you can grow your retirement savings with the same tax advantages of regular retirement plans, but with far more investing options.

You can read up on self-direction as a retirement strategy in our whitepaper library and our handy starter kits will help you open an account. The team at Next Generation is here to answer any questions you have about self-directed IRAs; contact us at 1.888.857.8058 or NewAccounts@NextGenerationTrust.com.