Traditional Retirement Plans: 3 Fatal Flaws


What is the real value of your traditional retirement plan?

I’ve discovered 3 fatal flaws with most traditional retirement plans.

Before I discuss these 3 flaws, let’s get a working definition for “traditional retirement plans.”

For our discussion, I’m talking about your straight up and down varieties as follows:

  • Pension
  • Sponsored retirement savings plan (e.g. 401k, superannuation)
  • Individual Retirement Account (IRA)

Did I miss any?  If so, lump them in the pile as well.

Now, what could possibly be wrong with these garden variety retirement vehicles?  After all, they come with some powerful built in features as follows:

  • Backed, supported and encouraged by both governments  and large corporations.
  • Provide certain tax advantages.
  • Everybody’s doing it; must be alright; can’t be that bad; must be safe.

Well, I’ve found at least 3 major flaws with these type of retirement plans.  Who knows, maybe there are more.  If you discover any, let me know.

So, what are the 3 flaws?

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An American Folk Tale – Custer at the Little Bighorn

Custer's Grave at Little Bighorn

Custer’s Grave at the Little Bighorn by Jim Bowen on Flickr.

Southeastern Montana in June is beautiful.  The rolling prairie with its lazy covering of tall grass carries on for as far as the eye can see.  The blue sky stretches from horizon to horizon in all directions; big sky country.  Occasionally, a river valley appears, along with a multitude of trees and other vegetation huddling close by to drink of the precious water.  The bright shining sun basks the entire scene with an invisible blanket of warmth.  In an amazing contrast of setting versus event it was near one such river valley, on a beautiful Sunday afternoon in Jun 1876, that one of the most famous battles in American history took place.

The combatants in this battle were Sioux Nation warriors including the famed Sitting Bull and Crazy Horse and five companies of the US 7th Cavalry lead by Lieutenant Colonel George Armstrong Custer.  On 25 June at approximately four thirty in the afternoon, the two fighting forces collided on a hill overlooking the valley of the Little Bighorn River.  When the sun finally set over the Montana sky, Sitting Bull, Crazy Horse and the Sioux warriors were engaged in rapturous celebration, while Custer and all two hundred and twenty five men under his command were dead.

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D-Day; A moment in the life of an airborne soldier.

D-Day: The Normandy Invasion

D-Day: The Normandy Invasion by The U.S. Army, on Flickr

Today marks the 70th anniversary of D-day, the World War Two invasion of Europe.

On 6 June 1944, British, Canadian, Australian, American and other allied soldiers stormed the shores of northern France in order to secure a foothold in Europe and begin the long hard march to defeat the Axis powers.

Can you imagine witnessing the events surrounding one of the most ambitious military undertakings in modern history? Can you imagine being involved in the operation itself?  What was it like to be there?

There are many resources available to help us piece together what happed that day but, unfortunately, most of them are dry and colorless. Devoid of the ‘human condition’ they tell us the facts – what happened, why it happened, how it happened, who made it happen and many other ‘nice to knows’ that put the event into a neat historical package. Few resources or more accurately – not enough – tell us about the plight of the common soldier.

While researching D-Day, I was most impressed with the airborne soldiers. They were the first ones in. The raining of airborne soldiers on the northern countryside of France began at about 1am and marked the beginning of the long anticipated return of the allied armies to French soil. Just over four years earlier the allies were expelled from Europe by the Axis forces at a place called Dunkirk.

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The First ANZAC Day

Background:  On 29 Mar 2014 I competed in a speech contest in Cairns.  I didn’t take out any prizes but I thought I’d share the text as I feel it’s a good commemoration of the upcoming ANZAC (Australian and New Zealand Army Corps) anniversary on 25 Apr 2014.  It’s a fictional account – based on my research – about the first ANZAC Day as seen through the eyes of one soldier who was there for the fateful landing in 1915.  It’s loosely based on another article I wrote back in 2010 titled, “Hop out and after em lads – The First ANAC Day.”

Photo: From the State Library of South Australia on Flickr.

The First ANZAC Day

Date: 25 April 1915, Sunday

Time: 4 a.m.

Location: 6 km off the coastline of Gallipoli.

Vehicle: A lifeboat holding 28 Australian and New Zealand Army Corps (ANZAC) soldiers and a crew of sailors.

Who: Sandford Shaw; everyone calls him Sandy; 27 years old, born in Baltimore and joined the ANZACs from a place called Broadmeadows about 16 km outside of Melbourne

Ladies and gentlemen,

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House prices going up … ?

House on Scale

House prices going up? Or coming down?

Are house prices going up this year?

Only one way to tell; wait until 1 Jan next year and see.  Other than that, there’s really no way to know.  After all, I don’t know anyone who can see into the future.  People can guess, they can forecast, the can conjecture, but they cannot tell for sure.  Only after the passage of time does the answer become clear …

“See that, prices did go up!  I told you they would!”


“I never thought the prices would drop, but they did!  Amazing!”

But, this is just hindsight.  And, the problem with hindsight is that although you’re always 100% right (after all, you know the answer, the event has happened!), unfortunately, you’re also 100% too late.  The opportunity has passed …

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