The goal of a comfortable retirement is getting more challenging by the day.
That's overwhelmingly thanks to the Fed's Zero Interest Rate Policy (ZIRP).
A recent poll reveals Generation Xers, the next wave of retirees to follow the Baby Boomers, expect to be a whole lot more self-sufficient.
With Social Security considered bankrupt by many accounts, it's little wonder.
That leaves investors increasingly reliant on themselves to build their own retirement nest eggs to generate income.
And this investment does the job – and more…
The Most Powerful Motivator
In a twisted way, it seems something good did eventually come out of the Financial Crisis: fear.
And now there's proof.
A recent poll by PNC Financial Services reveals that the next wave of retirees aims to be decidedly more self-reliant when it comes to preparation and savings.
Additionally, 65% of Gen Xers (aged 35-49) but just 45% of Boomers (aged 50-68) responded "I believe am am solely responsible for my retirement (no Social Security, employer pension, inheritance, etc.)."
That's a sea change – one that's necessary – and it has now translated into action.
Here's what I mean…
Amongst the Gen Xers, they've become concerned enough that more than half are now saving more for retirement than they did before the Great Recession.
Today, it's reached the point where more Gen Xers are socking away more to retire on than Baby Boomers, with 51% of Gen Xers increasing savings, compared with just 37% of Boomers taking that path.
But the search for relative safety, good capital gains prospects, and a rock-solid yield has gotten more challenging than ever.
The Fed Is Driving This Crisis
As we talked about back in April, the Fed's Zero Interest Rate Policy (ZIRP) is killing retirement yields. ZIRP, instead of helping individuals, is meant to help the Treasury meet interest payments on trillions worth of Federal debt.
According to Bridgewater Associates, 85% of public pensions could well blow up within 30 years – right about the time the youngest Gen Xers are due to retire – with obligations of $10 trillion vs. $3 trillion currently in assets.
Actuaries responsible for Social Security forecast the fund will run drier by 2033 than California's current water supply. That's only 18 years away. And meanwhile, researchers at Ivy League institutions Harvard and Dartmouth consider even that estimate to be too optimistic.
Boston University's Laurence Kotlikoff thinks Social Security's accounting should be likened to that of Enron, with $24.9 trillion in unfunded liabilities out to 2088.
The need to save more, and have those savings return more, is now as crucial as ever.
So where should you turn to meet those needs?
Love 'em or hate 'em, banks are notoriously profitable.
So… why not join 'em?
All you need is to look a little to the north.
A Canadian Institution with a Continental Focus
Bank of Montreal (USA) (NYSE: BMO) is Canada's oldest bank. Established in 1817, it has existed for nearly two centuries.
Over that time, it has consistently grown to become a $41 billion banker, lender, asset manager, and financier, boasting over 12 million customers.
Today, BMO is the fourth-largest of Canada's Big Five banks according to its market cap and assets. BMO Financial Group also ranks in the top ten largest banks in North America.
With total assets of $589 billion and over 46,000 employees, BMO is diversified across the financial sector, with its operations organized along three segments: personal and commercial (P&C) banking in Canada and the United States, wealth management, and capital markets.
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.