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Are you relying on a pension to provide for you during retirement?  If so, my friends, there’s very bad news out today from a very reputable source that you need to hear.  And I’ve got some great news that will really take the pressure off… but only if you act quickly enough.  I’m Bryan Ellis.  This is episode #271.



Folks, today the news is out from Moody’s Investor Services reports that this year, UNFUNDED pension liabilities from U.S. state governments will hit a whopping $1.7 TR — TR — TRILLION dollars.

What is an unfunded pension liability?  Think of it like this:  You have been promised a pension of $X per year during retirement.  If there’s capital to cover that, and a plan to grow that capital so that the commitments of the pension are upheld, that’s a FUNDED pension.

But if there’s a clear shortfall… if there just isn’t money to cover the commitments of the pension… and there’s no plan for making up that shortfall, that’s what’s known as an “unfunded” pension liability.  And that’s where many US states are today, again, to the tune of about $1.7 TRILLION by the end of this year.

No, you may be thinking… “so what… we all know social security is insolvent, but we all also know they’re going to make good on that somehow!”

Oh tisk, tisk, my friends.

We do know social security is insolvent.  But we absolutely do NOT know that Uncle Sam will be able to make good on that.

However, the massive unfunded liability we’re discussing today is NOT a federal issue, it’s STATE pensions that we’re talking about.

That makes it very, very different even than Social Security.

Why, you may ask?

Well, my friends, it’s like this:  One of the big things that the feds can do that states can’t do is to PRINT MONEY.

If the federal government needs more money, they can always just print some more.  Oh sure, it’s ever so slightly more complex than that.  But at the end of the day, if the US government needs to pay a bill and they don’t have the capital to do it, they can make more capital, period.

That, by the way, is why virtual currencies like Bitcoin are becoming so wildly popular.  I’ll be telling you more about Bitcoin here soon, as well.

But these states facing a nearly $2 TRILLION unfunded liability… when they run out of money… well, they don’t get to print new money.

What happens?  Well, what happens is that they are out of money.  So they don’t pay the money…

…And that means your pension – your retirement – the livelihood you were counting on – doesn’t get paid.

This is, to be certain, a rather dire situation.

Are you one of those relying on a state pension… or any other dubious source of financial security… for your livelihood during retirement?

If so, my friends, allow me to take this opportunity to recommend to you a change in philosophy.

Up until now, this notion of “self-directed investing” has been as much a matter of personal preference or economic philosophy as anything else.

Now it’s becoming a financial imperative…

….That is, if you want to be an independent economic entity during your retirement.

Isn’t it interesting, folks, that this massive $1.7 trillion unfunded liability exists DESPITE the fact that in the last 10 years, the Dow Jones Industrial Average has bolted upwards by over 8,000 points!  And note – that includes the economic bloodbath of 2007 and 2008!

You know, as an aside, something very curious:  over half of that growth… just over 4,000 points of increase on the Dow Jones Industrial Average, have happened since the day after the Presidential election of 2016.  Interesting… but I digress.

So where does this leave us?

My friends, again, if you’ve been interested in self-directed investing primarily as an intellectual curiosity, or even as an expression of your opinions about economic freedom, but you haven’t yet taken the plunge to get involved, the time to do it is now.

The time is now because when it’s all said and done, you’re the only person who is truly responsible for, and who truly cares for, your future and that of your family.

The federal government doesn’t.  State governments don’t.  Governments play a valuable role, I heartily admit, but ours have become so large that the primary purpose of them is not to serve the citizenry, but for bureaucrats and other government insiders to maintain their power and cushy financial situations, even at the expense of those of us who pay the bills.

So what do you do?

Folks, in the coming few days, we’re going to get back to basics… and I’m going to help you come up with a great plan for moving forward, no matter where you are right now.

And with that in mind, I do ask a favor of you:  Visit today’s show page at SelfDirected.org/271 and leave a comment with the answer to this question:  Why do you think it’s safe – or not safe – to rely on conventional means (like state pensions) to fund your retirement?

I’d really love to hear from you there at SelfDirected.org/271.

And as always… if you like this show, please help me to spread the word!

My friends, it’s been a pleasure being with you today.  Invest wisely today, and live well forever!


Links & Resources

  • Report from Moody’s re: $1.7 Trillion of Unfunded Pension Liabilities

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Bryan Ellis

I am host of Self Directed Investor Talk, which I'm told is America's #1 podcast and for affluent self-directed investors. I'm also something of an expert in self-directed IRA's, solo 401k's and 1031 exchanges. You can find more of my writing in some cool places like TheStreet.com, Entrepreneur.com, ThinkRealty and even Forbes (that was always one of my goals!). I live in metro Atlanta, Georgia with my wife and business partner Carole Ellis(she's a real business partner... not just because she's my wife... I'd want to work with her if I wasn't married to her... and I'd want to marry her, too). I also have 4 children ranging in age from 2 to 20 (yes, you read that correctly). It's my goal to be the name everybody thinks of when they think of Self-Directed IRA's and Solo 401(k)'s.