Why Most People Will Never Be Able To Retire

Do you dream of the day when you can finally put your feet up, relax, and enjoy your golden years? Do you see yourself sitting on a comfy chair by the fireplace, reading stories to your grandkids? Well, tough luck, because most people in this generation will never be able to retire, and that dream will be just that—a dream. Let us explain.

Welcome to a lux. So, to understand why you'll never be able to retire and why this is such a problematic topic that people fail to talk about, well, we need to go back a little bit. Chancellor Otto von Bismarck created the first retirement program in Germany in the late 1800s because he wanted to help the elderly and reduce poverty. He recognized that as people got older, they were often unable to continue working and needed financial support. So, by introducing a pension program, Bismarck aimed to provide this support and improve the quality of life for elderly people.

But here's the thing. Elderly people in the 1800s meant 40 to 45 years old. That was the average life expectancy back then, and the retirement plan kicked in after you reached 70. So, it's fair to assume it didn't cost Bismarck that much money to keep the program going, as the vast majority of people, well, they didn't even come close to benefiting from it. But regardless, the idea went viral. Well, other countries soon followed, and in the United States, Social Security was introduced in 1935 to provide financial support for the elderly, disabled, and widows. Some things did get adjusted to fit the modern world, and retirement became a whole industry. It was seen as a reward for a lifetime of hard work.

This was the world your grandparents grew up in. They had everything going in their favor: strong economic growth. Many people from that period saw huge increases of their salary compared to the cost of living, employer-sponsored pension plans. Since retirement became an industry all on its own, many had access to employer-sponsored plans that guaranteed a good source of income in retirement, cheap real estate. The value of real estate started to skyrocket after most Boomers got their homes, stock market growth. They also benefited from the growth of the stock market, with many investing in stocks, bonds, and other financial assets that provided long-term returns over time.

And these are the reasons why you see Boomers living in million-dollar mansions they got with a busboy salary back in the 70s. This is also where your problems start and the reason why most of you will never be able to retire. You see, for your parents and grandparents, retirement was a matter of when. For you, however, it's a matter of how. They didn't have to ask themselves how because it was given to them by default. But for you, well, not only do you not have any of the conditions that they had, you actually have the opposite.

Let's start with the cost of living. The cost of living compared to the average salary is a lot different now than it was back in the 70s. Back then, life was a bit easier, and people had more money to spend on the fun stuff. For example, in the 70s, you could buy a house for around thirty thousand dollars, and the average salary was around fifteen thousand. So that means that people had a lot of extra cash to buy some funky clothes. But now, things are a little bit different. Houses cost around three hundred thousand dollars, and the average salary is only about sixty. This means that people are spending more of their money on just the basic stuff, like housing, health care, and entertainment. The ratio has more than doubled. In other words, you need to be twice as rich as the average working individual to be able to live as comfortably as your parents did back in their time.

Today, the cost of living is increasing significantly, outpacing the growth of the average salary. So, no strong economic growth for you, and no real estate for you either. So what about employer-sponsored pension plans? Well, in the past, people counted on their employers to help them save for retirement. These plans were called defined benefit plans, and they were a big deal. But now, things have changed, and these plans aren't as great as they used to be. For starters, a lot of companies are choosing a different type of retirement plan called defined contribution plans. So this means instead of the company taking care of your retirement savings, you have to save on your own. In other words, nobody is saving your old ass but yourself.

Another big change is that more and more people are working as freelancers or contract workers, and these types of jobs usually don't come with retirement benefits, which makes it harder for people to save for their golden years. Finally, people are living longer, which means it's becoming more expensive for companies to pay out retirement benefits, and all of this is making it harder for these plans to stay strong. All in all, defined benefit plans just aren't as good as they used to be.

So, you can't rely on your government or your employer to take care of you, which leads us to the problem of why most people won't be able to retire. They think of retirement as the way their parents and grandparents did. They expect it to be this laid-back period of life while they get to enjoy the benefits of a lifetime of hard work. But they don't realize that we live in a completely different reality. The world has changed a lot, and the way we do things has changed a lot. We, as a society, have changed too. A 30-year-old man in the 70s was having a barbecue in his own backyard with his wife and two kids. A 30-year-old man today posts outfits of the day on Instagram from his parents' basement.

We're not saying this to bash social media trends; we're just saying that life looks different now, and the reality will hit soon enough. So if you're in this situation, what do you do? Well, the first thing you need to do is to realize that there is no one that will take care of you but yourself. You are 100% responsible for how your financial future looks. You can't rely on anyone but yourself to make sure you actually get to enjoy life, not just survive it. You can blame the system, the government, the politicians, the rich—anyone you want—and you might be right in some of those cases. But that does not change the reality; it only makes you bitter.

So you need to adapt to the new world and learn how to navigate it. The second thing you need to realize is that all the bad news also comes with good news. For one, you have at your disposal the entire knowledge and learnings of humankind until today. Everything that we as humanity have collectively figured out so far is like two clicks away. So there's absolutely no excuse for you to be financially illiterate. You can say that school or your parents didn't teach you how taxes or retirement plans worked, but there's nothing stopping you from learning now. You can't navigate the new world if you don't know how it works.

Secondly, you currently have access to the global marketplace with no barriers of entry. You have more options now than anyone ever did in the past. And lastly, you need to understand that taking care of your financial future is not something reserved for entrepreneurs or people with possibilities and resources; it's for everyone, and it should be for everyone. It's your personal duty to take care of the future you. You don't need to be on the cover of Forbes to be financially independent. Instead, you only need three things: intent, knowledge, and execution.

Intent means your desire to change your situation. Do you actually want to take control of your future, or would you rather let the universe roll the dice for you? Many are comfortable with their situation and believe that things will turn around eventually, or they avoid reality. For example, we told you AI is going to change things, and a lot of people will be fired, including technical people. You didn't believe it; you said it's impossible for companies to fire hundreds of thousands of people out of the blue. Well, have you checked the news? Because it's happening.

So you need to make the decision of being in full control of your future. Then you need knowledge, which translates to understanding how the world works and where you fit into it. How can you make things work out for your particular situation? This is sort of a broader topic that needs its own video. And lastly, a luxor, you need to execute, meaning you need to put in the hours, show up, be consistent, and relentless. These are things that most people don't want to do, and these people will suffer the most when reality hits, and nobody will be there to take care of them.

So, a luxor, will you be one to build your own future or not? If you found this video valuable, write "my own future" in the comments, and we'll see who are those who want to take things seriously. We'll see you back here again tomorrow for the Sunday motivational video. Thank you.