Fear the reaper.

As with everything tied to the fickle threads of time, the service of a knight in the 14th century was destined to end sooner or later. If sooner, possibly due to a blow delivered on the battlefield by a crushing mace, or the spiked end of a war hammer. Or it could arrive via the lingering wasting of minor infection, that the medicine of the time was unable to treat.

However, not all men-at-arms would have their service ended early by blade, arrow, or disease. Some would be blessed by fate to return home from war, and be granted years of peace to live out the remainder of their lives in their homelands.

“My helmet now shall make a hive for bees,
A man at arms must now sit on his knees.”

But for many returning knights returning to England in 1348 at the end of King Edward III’s war with France, this posed a minor problem. Primarily, a financial one.

After providing up a decade of service to their king, some knights returned home to find their financial house in disarray, a result of their holdings being mismanaged while absent. For others, serious wartime injury like loss of limb meant they could no longer earn a living, pushing them into dire poverty. Others still were forced to sell their assets at home, as a means of raising funds to pay ransom after they or a family member were captured by the enemy in France.

King Edward could not let these injustices befoul the lives of men who had faithfully given him years of dedicated service. And so at the end of the war, he founded the College of St George, as a foundation that could become caretaker to his financially enfeebled knights.

Over time, they would come to be known as his ‘Poor Knights’, and were given what became one of the first pensions in history—it was provided as a payment of forty shillings per year, on top of free accommodation being given to knights in need at the College in Windsor Castle.

“Goddess, allow this aged man his right,
To be your bedesman now that was your knight.”

When creating the foundation, Edward intended for it to be something that would continue on throughout the ages, long after he had been replaced by a new king. Unfortunately though, his fund wouldn’t thrive indefinitely.

Some two hundred years later at the time of Henry VIII, due to decades of financial mismanagement, Edward’s fund had dried up to a mere trickle. Whereas several hundred knights were previously being taken care of by it, now a mere thirteen knights were supported by the College of St George. The pension had all but disappeared.

These long-passed days of the armoured knight may well be over. However, the struggle of the Poor Knight’s disappearing pension fund is one we may all experience in our lifetimes.

In case you haven’t heard, the UK recently narrowly avoided a financial catastrophe, the result of a near-meltdown of its government bond market. But what most people aren’t aware of, is how close this looming calamity came to wiping out a large portion of the nation’s pension funds.

According to the Bank of England, the bond crisis caused pension funds to come under serious strain, with many them coming dangerously close to going totally bust; in the bank’s own words, it was only “hours from disaster”. A result which would have made trillions of pounds in value contained within UK pension funds disappear almost overnight.

The worst part? This would have been primarily due to the financial incompetence of the UK’s economic caretakers, but would have primarily meant catastrophe for millions of normal Brits who had worked a lifetime to save for retirement.

This is a problem that would have only had localised negative consequences for the UK. Unfortunately, there’s a much more pressing issue that will soon hit pension funds worldwide, and come crashing down on top of all of us.

Globally, birth rates are dropping throughout the entirety of the developed world. Primarily spurred on by rising levels of wealth and education, but also the terrifying fact that fertility has crumbled by 50% during the last seven decades, the result is that in the US, Australia, and the vast majority of Europe, the number of new humans being born with each passing year are almost consistently setting new record lows.

In Japan, the birthrate is already so low that the government is planning to fund matchmaking powered by artificial intelligence to set up its citizens together in the hope they’ll have children to bolster the population.

But you might be asking, “what the hell does this have to do with my pension?”

Well, you might be of the impression that your pension fund is a well-managed machine, designed to have enough money to support all future retirees. The sad reality is that this is far from being the case.

At the end of last year, the deficit for state pension funds in the United States alone was almost $1 trillion dollars, with only around 40% of all funds having enough money in them to cover future beneficiaries. And if you think that number sounds bad, it’s worsening severely over time, as this shortfall has almost doubled in merely five years.

I know I said this last week, though due to many emails from potential students, we’ve decided to extend the discount for the one-year celebration of our private membership ‘The Codex & The Order’—a few of you wanted extra time to join at the special 25% off pricing. However, we will be ending this offer for good tomorrow at midnight, the 7th of November. Use the code ONE at checkout (click the ‘Add Coupon Code’ link on the checkout page) when you join here, to claim the discount off a yearly or monthly membership. This is your last chance to join the 3,000+ students already inside at this price.

On a federal level, the situation isn’t any better.

For a pension fund like Japan’s GPIF or the US Social Security system to function as intended, it needs growth. Primarily, a growing supply of new bodies entering the workforce to pay taxes—taxes that will go to paying the pensions of those who are retiring. However in most nations, there are currently not enough people born today who will be entering the workforce in a couple of decades generating tax revenue to pay for the pensions of those who will be retiring around the same time.

Basically, if you’re expecting to receive a pension anytime in the next 20-30 years or beyond, there’s a good chance your government won’t be able to provide one to you. The funds will be broke.

But your government won’t tell you that. Because it doesn’t really seem to care.

In previous newsletters, I’ve already spoken about how private pension funds in nations like Poland, Hungary, and Ireland have been seized by governments that needed to generate cash because of their own financial negligence. Actions that have left thousands of innocent pensioners with far less to retire on than they expected, after a lifetime of toiling for their nation. Something I predict will happen with increasing frequency as developed nations plunge further and further into debt.

Obviously, none of this is comforting.

Long story short: if you’re ever expecting to retire, you’ll need to make preparations to take care of this yourself. Nobody else will—especially your government, despite their promises.

So, what’s a person to do? Well, I can’t tell you how you should prepare. That’s not my place, especially considering our unique individual circumstances.

But for me, setting aside at least 10% of my monthly income (though ideally 20%) to be invested into hard appreciating assets like real estate, precious metals, or even commodities is a good start. And if the idea of setting aside up to a fifth of your income for future safekeeping seems like an impossibility, then it may be time to increase your income or earning ability in whatever way you can, as soon as you can.

Just remember: the sands of time wait for none of us.

Although I have no fear of ageing, and I can honestly say that my life has become exponentially better with each passing year, that doesn’t make me forget the reality that there will come a time when I may no longer be able to support myself. The fact I’m only 37 means this likely won’t be anytime soon, but I’m sure as hell not going to leave things until it’s too late to ensure a comfortable life for myself later on.

I don’t fear the reaper. But I do fear a lack of financial security in the years before he arrives.

The numbers show our governments almost certainly won’t be there with a safety net when it comes time for us to retire. I fear for anyone who has the naïvety to believe otherwise.

Don’t let that person be you.

Leon Hill.
Co-founder, Abundantia.