Q: ‘’Why do we invest?     A: ‘’For a better future … for our retirement’’

So starts the 2018 video The Coming Retirement Crisis Explained– over 1.5 million views – by Raoul Pal, ex-Goldman macro analyst and founder of RealVisionFinance. After seeing his father’s investments wiped out by the double hit of the 1999-2000 and 2008 financial crisis, Raoul has been passionate about raising awareness of the single most important issue facing the Baby Boomers (born 1946-1964).

Unable to rely on income from interest on savings and forced to draw down on our capital, people of my generation have had to radically reset their retirement lifestyle expectations. The pension fund glossy brochure images of silver-haired seniors enjoying a gin and tonic on the terrace at sunset are pure fantasy. Instead, a toxic cocktail of longer life expectancy, falling interest rates and imminent recession awaits those on the verge of retirement.

Q: ‘’Can I afford to retire?’’    A: ‘’No!’’ 

I am not alone. A 2019 poll from the Associated Press-NORC Centre for Public Affairs Research found that 1 in 5 US citizens over 65 were either working or actively job-seeking while 2 in 10 employees over 50 don’t expect to stop working.

Since turning 60, I have had to cast aside my pride, my professional CV and my previous salary expectations and join ‘the gig economy’ to take on seasonal retail work, cat-sitting and house-sitting stints, garden design and maintenance, host family accommodation for language school students and  casual work as an exam invigilator.

How often have I thought back to the heady 80’s; my company Alfa Romeo, expense account lunches at Chez Nico and Business Class flights around Europe and mused: ‘If they could see me now?’

The blame for this situation does not rest with individual retirees who did the prudent and sensible thing by putting money away for their retirement in enticing savings/pension schemes promising high returns. The fault – according to Raoul Pal – lies with the structural flaws of the underlying financial system, driving pension funds into ever riskier investments in the desperate search for yield to close the gap between promised and actual returns for retirees… a shortfall that amounts to $400 billion in the US.

Q: ‘’What to do?’’     A: ‘’Review your savings and investments’’

To close his 2020 follow up video: ‘How Unfunded Pensions Will Destroy Your Retirement’, Raoul proposes a range of alternative investments – including Bitcoin, of which he has recently become an enthusiastic supporter. But his main message is that instead of sleep-walking into this twilight zone, we should all commit to taking personal responsibility for the level of risk being taken with our hard-earned money.

This involves doing your own homework. Don’t rely on the passive indexation favoured by pension funds. Shift your mindset away from investing to profit towards investing to preserve. At the very least, it is vital to safeguard whatever capital you have managed to accumulate over the years before its value is eroded by negative interest rates, central bank money printing or even – as in Cyprus and Lebanon – state seizure of citizens’ bank deposits.

In addition to joining the gig economy, switching from Waitrose to Aldi and opting to cycle rather than drive; my retirement ‘mindset reset’ has led me to invest in precious metals with Goldmoney.com and open an Autobuy account with Coinfloor to save in Bitcoin.

Q: ‘’Would you swap real coffee for instant or champagne for prosecco?’’     A:   ‘’That would be a step too far!’’