The problems with retirement
Retiring is something most people are eagerly looking forward to.
Finally being able to stop working, being allowed to live your life the way you want it after having worked for 40+ years for someone else and having paid 50%+ in taxes.
Once you’re retired, you will then receive a pension from the government or your previous company, a monthly income , which is usually based on your contributions to the system.
The working populace pays for your monthly income, and they in turn expect to be taken care of when they are “entitled” to their retirement.
This system is seriously flawed, because you are relying on your government (or ex-company) to keep paying you, using other people’s money.
Relying on a pension, on a retirement system, is something that can and most likely will cause you a lot of headaches, stress and financial woes in the future.
Today I’ll tackle several big problems with the retirement system.
A pension makes you dependent on external factors
If you are receiving retirement benefits, it’s because the government or your former employer grants them to you.
You might think you are entitled to it, because you’ve worked hard and paid your fair share, but your benefactor can decide at any point to stop paying you, or heavily cut into the amount you get.
You are financially dependent on the benevolence and the good will of your (probably Western) government or former company, and that’s a horrible situation.
In order to be financially stable, you have to ensure that your income comes from internal sources, such as your investments or your own businesses.
A pension is an external source of income, and it can be cut off at any point without your consent, and it leaves you very vulnerable.
You might not even get any retirement benefits
If you’re an older person and are retiring soon, this point probably doesn’t apply to you.
Chances are you will in fact keep receiving a pension until you die, let’s say 20 to 30 years after you retire.
However, if you’re a younger person and you just started working and aren’t “eligible” for a pension for another 30 to 40 years, I fear you might be out of luck.
When the Western governments start to feel their collapse more and more, and crises become more commonplace, they could go bankrupt … which means there won’t be money to pay you anymore.
A similar scenario can occur with your former company.
To many people, a pension is a sure thing, something they can rely on, but it most certainly is not.
The social welfare system is by far the largest expenditure for Western governments, and it just becomes more and more expensive every year.
This isn’t sustainable, and at some point it will break down.
You are gambling with your future if you are depending on getting it, which isn’t a good strategy for a secure and happy life.
A pension is a fixed income
I don’t mean “fixed” as in you’ll always get it, but more that the amount of money you’ll get is more or less predetermined.
If you get $3,000 a month now, chances are that amount won’t go up much for the rest of your life, even if the cost of living increases, due to massive inflation caused by the ever-increasing printing of money our governments engage in.
And they’ll need to keep printing money in order to keep paying everyone’s pension, which puts them in more debt, which causes them to collapse even faster.
I’ve talked about the potential scenarios for a Western collapse before, and hyperinflation is a definite possibility.
Relying on retirement benefits is a detrimental attitude
If you keep relying on a pension, you remain a slave of the system.
You are basically stating that you are happy with working nearly your entire adult life for someone else, after which you are depending on the benevolence of the government or a company.
You are submissive, dependent, and for some reason you agree to this.
In addition, you also develop the mentally of spending the best years of your life working hard and earning money for someone else, paying plenty of taxes, and only when you’re old and less capable being allowed to reap the benefits of your labor.
This is madness. Why would you structure your life like this, if there are other and better options?
The only true alternative to relying on retirement benefits is refuting them and accepting that you will not be getting any assistance from anyone, let alone your collapsing Western government.
You are completely dependent on yourself, and you have to structure your life around that fact.
I would say self-reliance without dependence on a pension boils down to the following factors:
- Attain several sources of location independent international income
- Invest as much as possible in a varied portfolio of (ideally) income producing assets across the world
- Minimize your taxes (single digits are great, 0% is even better)
- Never again work for someone else or for the government
This approach will ensure you are fully self-reliant.
There are several advantages to following this road:
- Your income comes from within, and no single person, company or government will be able to cut it off. You’re financially stable
- If you’ve invested sagely, you’ll start receiving more and more money every month, which you can then use to invest again. That way, your income grows and grows through the magic of compound interest and you’ll be able to easily outrun inflation
- You are your own boss. You can live your life the way you want it, wherever you desire. You don’t have to wait until you’re 60+ to start enjoying life
- Because your income isn’t dependent on your location, you can escape the West and live wherever you want. Somewhere at the beach in Thailand, the Peruvian mountains, or a metropolis like Dubai? All of them are possible, you can decide to explore the world while you are still physically capable of doing so
Can such an approach be scary and overwhelming? To many people, yes, it is.
But to me, and I hope to you as well, it is immensely liberating.
Yes, you do have to put in much more effort and you take on a lot more responsibility.
You cannot just live your life on auto-pilot and go through the daily grind, expecting to be taken care of.
You’re completely dependent on yourself, which is a frightening prospect for many people.
But the amount of freedom the peace of mind and the satisfaction you gain make it completely worthwhile.
Our retirement system is hugely flawed and you cannot deny or avoid its problems for much longer.
The only alternative is to rely on yourself, and not on the grace of a collapsing system.
Do not procrastinate, start taking action today by setting up your own businesses and making plans to move to a less-bad and less-taxed country.
One thought on “The problems with retirement”
Thanks for your blog, nice to read. Do not stop.