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Motor City Files For Bankruptcy – Pensions at Risk

Last updated 4 years ago

Just this past week, Detroit, once a major industrial hub in the United States, filed for Chapter Nine bankruptcy protection, earning the dubious award of the largest municipal bankruptcy filing in history. The bankruptcy filing follows years of decline in this once-thriving auto manufacturing town, but the worst part of it is, this dismal state of affairs has required the city to reorganize and potentially cut payments to investors and retirees to about 17% of what they are owed. These involuntary cuts to retirees benefits have never been seen before in a municipal bankruptcy, and unfortunately, the insurance company that protects the loss of pension benefits for private corporations does not back the pensions in the public sector.

The loss of retirement benefits in Detroit leads one to think about the bigger issue facing America in the decades ahead — that of Social Security. This government program, established in 1935 as a financial safety net for older Americans, requires working Americans pay into this system every paycheck via a tax called FICA.  But as the baby boomer generation begins to retire and overwhelm the Social Security system with an upside-down demographic dilemma, a deficit of $55 billion is weighing on the United States.  Consequently, current projections target Social Security to become insolvent in the year 2033.

The devastating reality is that the retired police, firefighters, and public employees of the City of Detroit face protracted legal proceedings in the fight for what is rightfully theirs, and Social Security is clearly not a safe bet for retirement security, making this is the era of personal financial responsibility. One way to take control of your personal finances is to diversify with physical gold held in your own possession.

While the rising U.S. dollar has kept downward pressure on the price of gold in recent weeks, rising economic uncertainty continues to support the yellow metal’s role as a safe haven, as is evident in this week’s price spike.

Physical gold is a vital component to any portfolio and should be strongly considered in plotting out a long-term investment strategy that will secure a sound financial future for you and your family.

Call Capital Gold Group today at (800) 510-9594 to speak to one of our gold specialists and find out how you can get started with gold!  For those of you who missed the webinar with Jon “DRJ” Najarian. CLICK HERE for a free download.


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