How can you protect yourself if some or all of the consequences of the baby boomer crisis become reality?
First, you need to be realistic. If you are under 50, you simply cannot expect to get anything like the level of benefits your parents are receiving from Social Security and Medicare. At best, you will need to regard Social Security as a supplement to your retirement income and Medicare as a supplement to your health plan, and not the major component of either.
That means you will need significant supplemental retirement income, such as a very well-funded IRA, an annuity, or a high amount of inflation-protected savings. You will also need a strong, independent medical plan, such as a Medical Savings Account.
It will also help if you do everything you can to live a healthy lifestyle, get regular medical checkups and have a regular program of exercise.
Second, get out of debt. High mortgage payments and a ‘living-on-the-financial-edge' lifestyle are never prudent and potentially disastrous in light of the impending baby boomer crisis.
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So, save at least 10% of your take-home pay. Get out of debt. Pay off high-interest credit cards as quickly as possible. Buy only what you absolutely need, and don't live beyond your means.
If you own your own home, that's great, as it may be a significant source of capital when you retire, but make sure your house isn't overpriced and your mortgage payments are affordable.
In many parts of the U.S., real estate is greatly overpriced and could easily come crashing down as interest rates rise. If you have an adjustable rate mortgage (ARM), zero down loan or some other form of expensive financing, change to a fixed-rate mortgage or downsize to a more affordable home, particularly if you are approaching retirement age.
If you have an ARM, a mere 2% increase in interest rates could cause your payments to soar by 30%!
Third, make sure your core assets are safe. If you own a home in a "hot" market, such as New York, Boston, Las Vegas, Los Angeles or San Francisco, now is the time to sell and buy property in a rural or exurban area.
Make sure your bank and insurance company are safe, by checking their solvency. The easiest way to do this is by getting their financial safety rating from Weiss Ratings, Inc. at 1-800-289-9222, Fax 1-561-625-6685, www.weissratings.com.
Fourth, invest in assets that will survive the Baby boomer crisis, which will bring about high interest rates, inflation and falling home values.
Investments that will likely do well as a result of the baby boomer crisis include precious metals - particularly gold and silver (platinum is currently overpriced), commodities, foreign-currency accounts, including Swiss francs and New Zealand dollars, underpriced foreign real estate, and foreign equities and bonds (including global funds), and select health-care, nursing-home and other stocks. We have made some specific stock recommendations below.
Gold is the best hedge against a falling dollar and economic turbulence. Your portfolio should have 5-10% of its value in an assortment of gold investments: coins, gold stored in a safe (preferably in Switzerland), and gold investment stocks.
It is very important to have at least some assets outside the U.S. as the year ahead will be troubling ones for the U.S.
You can survive the baby boomer crisis, but the time to prepare is now.
Editor's note:
Find the secrets to long life from the Mayo Clinic – Click Here
The Baby Boomers will wreak havoc – protect your wealth! Click Here Now
Social Security crisis is just the beginning – all pension systems are in danger! Read More Here
Secret Health Exams That Can Save Your Life – Click Here Now
