$50 Trillion in National Debt: What Happens to Your Retirement?

How could $50 trillion in U.S. national debt affect your retirement savings? In this video, Augusta Precious Metals’ Director of Education, Devlyn Steele, discusses federal interest costs, central-bank gold buying, expectations for the U.S. dollar, and the long-term questions retirees may want to consider.

$50 Trillion in National Debt. Can You Believe It?

Not today, but close.

Currently, we’re at $40 trillion in national debt and climbing. And if we continue to add debt at the current levels, we will hit $50 trillion in national debt in five years or less.

If you’re approaching retirement or already retired, what you really should be concerned about are the debt levels and economic environment that you’ll be retiring in. That’s what’s going to determine your retirement lifestyle.

Retirement is a 20- to 30-year event. This means you may need your savings to carry you for another two or three decades.

What Happens to the Dollar, Interest Rates, Inflation, and Your Purchasing Power?

The real question is what happens to the dollar, interest rates, inflation, and your purchasing power as America moves toward $50 trillion in debt and possibly beyond.

And this week added a new piece to that story. The Federal Reserve just raised its target interest rate to between 3.75% and 4%. Its first hike since 2023.

Let me break this down for you, because as America’s debt keeps growing and interest rates rise and we go from $40 trillion to $50 trillion, meaning $10 trillion more has to be financed, old Treasuries expire and also have to be refinanced at the higher interest rates.

What does this mean? It means more of your and my tax dollars are simply going just to pay interest on the debt.

Which raises a bigger question.

Who Keeps Buying All This Debt?

For decades, the answer to that question was simple.

Since the United States dollar was the most dominant reserve currency and Treasuries were considered the most important safe-haven asset, when the world grew more uncertain, central banks bought more and more Treasuries.

As our debt keeps increasing, it becomes very important to us that they continue to buy our Treasuries.

But the central banks around the world who control the reserves are doing something very telling. They’re increasing their gold purchasing. For four years running, central banks have purchased roughly 1,000 tons of gold per year, about double the previous decade’s pace.

And the World Gold Council recently asked reserve managers what comes next. Their answers were striking.

• Eighty-nine percent of reserve managers expect global central bank holdings to keep rising.
• A record 45% expect their own institution to add gold this year.
• And here’s the number I really want you to remember: 74% of reserve managers expect the dollar to represent a smaller share of global reserves five years from now.

Five years.

That’s the same timing I told you about where, if we keep increasing debt at the same levels, we’ll hit $50 trillion in national debt.

I see a giant wall in front of us. Because that’s the same time that the world reserve managers are predicting that the dollar will become a smaller percentage of their reserves. That’s a collision course that retirement savers should pay attention to.

Ownership and Control Are Two Different Things

For decades, safe mostly meant creditworthy.

• Can the borrower pay me back?

Today, reserve managers weigh a second question.

• Can I always access the asset I own?

The sanctions that followed Russia’s invasion of Ukraine put that question on the table. Governments watched their assets, which were tied to another government’s system, become unreachable almost overnight.

It turned out that ownership and control are two different things.

And gold solves both of those problems. Gold stands on its own. Its value lives in the metal itself, owned outright, held under your control, and answerable to no one’s balance sheet.

Now, central banks are deciding two things: how much gold to hold and where to keep it.

• The Netherlands just relocated gold reserves out of North America for crisis readiness.
• And France moved 129 tons of gold out of the New York Fed back to Paris.

For these institutions, gold performs three functions at once: diversification, liquidity, and control.

Now, let’s take a look at what China’s doing.

China just posted its biggest monthly gold purchase since 2023, marking 22 straight months of buying.

Think about the time horizon behind a decision like that. We are inundated with the headlines and the reality of our life today. Dollar’s up, dollar’s down, oil’s up, oil’s down, gas is outrageous, prices are growing, and we’re very, very concerned and really focusing on the day-to-day.

However, what we really should be thinking about as retirement savers is five, 10, 15, 20 years from now. Because if things keep going the way they are, retirement life is going to become harder and harder.

Because if you’re 50, 60, or 70 today, you’re not building a portfolio for next month’s Fed meeting. You’re building it for 2031, 2036, 2041, and perhaps beyond.

Let’s Recap Where We Are Today

• National debt has crossed $40 trillion and it keeps climbing.
• Rates just moved higher again.
• More debt has to be financed and refinanced at those higher rates.
• Central banks have stepped up their gold buying for four years running.
• China just logged its biggest monthly purchase since 2023.
• Nearly three-quarters of central bank reserve managers surveyed expect the dollar’s share of global reserves to decline over the next five years.
• And some countries are reconsidering not only how much gold they own, but where they physically keep it.
• $50 trillion in debt at the current spending levels in five years or less.

But what we haven’t talked about is 10 years from now, 20 years from now. Are we going to be at $60 trillion, $70 trillion, $80 trillion, $100 trillion in debt?

Central banks are buying more and more gold every single month. Not because of the price, but because of where they see the world heading in the future.

As retirement savers, we have to think about the retirement environment that we are going to be living in.

And we have to take care of ourselves.

Think about it, plan for it, and do just that.

Take care of yourself.