Cramer: Saving for Retirement? Don’t Put Your Money Here (Savings Bond Risks)

Saving for retirement? Mad Money host Jim Cramer explains why investing in savings bonds may not be such a lucrative idea. To develop real financial independence, Cramer says you need to make your money work for you.

If you’re under 50, Jim Cramer doesn’t think you have any business holding either Series EE US Savings Bonds or Series I US Savings Bonds in a retirement portfolio.

“Your investments must meaningfully grow your personal wealth so they can ultimately supplement your income later in life.” And although savings bonds are safe, “they fail miserably at helping you achieve this important objective,” Cramer said.

Here’s why…

“Series EE savings bonds are 30-year bonds that pay a fixed interest rate for the first 20 years, although in the last ten years the Treasury department can adjust the rate,” Cramer explained.

“They currently yield about 0.1%. That’s dramatically lower than you’d get even from a 1-year certificate of deposit issued by your bank. Heck, it’s barely better than hiding your money in the mattress. In other words, these Series EE bonds are not making your money work for you.”

Cramer says series I bonds aren’t much better.

“The Series I is a 30-year combination fixed rate bond that’s adjusted for inflation,” Cramer added. “Right now, they pay you a 1.38% interest rate. Although higher than the Series EE, it’s still not increasing your wealth in any meaningful way.

As you can see from the examples above, savings bonds don’t generate any meaningful returns. In fact, if you’re holding a mortgage, or student loans or some other type of loan, putting money into savings bonds decreases your wealth. That’s because the interest you owe on your loans is greater than the interest you earn on your bonds.

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Are Bonds Still Considered A Safe Investment?

I was always told bonds were safe, are they?

Terry Sacka of Cornerstone Asset Metals says, “Start by asking General Motor bond holders who got ZERO in the bailout, but with that said here are some important facts regarding bonds.  Currently our interest rates are near zero, when they raise the rates the bonds in the U.S. will plummet in value. Currently the Fed is buying 90% of our bonds what will happen when they stop, who will buy them?  Just last month the Treasury renewed $7 Trillion in maturing bonds, and must continue to sell more in order to survive and pay our mounting baby boomer debt.  They can never stop this cycle! ”

He went on to say, “Shadow Statistics put’s inflation at around 10% AND SURE TO GO HIGHER, so is it a good future protection of your retirement to lose value every year you hold them?  Diversification is more important now that any time in recent history, when baby boomers start pressuring the system you better have a chunk of hard tangible assets you can put your hands on, feel and pass down to your heirs.”

True Diversification with Precious Metals: Gold and Silver

There’s a great wealth transfer taking place right now. Are you on the losing end or the receiving end?

Wealth Transfer Planning

Precious metals have always been a safe haven for investing in high inflationary times. Historically speaking, a recurring cycle that always seems to repeat itself is periods of high inflation as a precursor to the crash of paper currencies. Those who understand this wealth cycle and position themselves in gold and silver are those who prosper.

Precious metals are assets that will never lose their value. They are not subject to systematic risks as paper money and serve as a hedge against inflation and other threats of devaluation. Cornerstone Asset Metals was established to help guide investors safely in and out of the precious metals market.

The Great Wealth Transfer

Watch Terry Sacka: The Wealth Transfer show on the Christian Television Network discussing the financial and influential decline of the Western world and the simultaneous wealth increase of the East. With the wealth of nations shifting, it’s imperative to understand moving forward how hard tangible assets will allow you to maintain a quality lifestyle.

Visit the Wealth Transfer archive for more episodes. Learn more about how buying gold and silver today is a smart move for your investment portfolio.

» Contact Cornerstone Asset Metals today to learn more about buying gold and silver as an investment.

» Read our article: Why Silver is Going Up Today?

» Read our article: Why Gold is Going Up Today?

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