AmQuix Urban Legend Exposed
of the most famous Amway Urban Legends passed along by Amway Quixtar distributors is the
quote that "according to the American Bankers Association., 95% of all people who
reach retirement age or either dead or broke".
On a Quixtar bulletin board there was a small debate about this topic with a link to the Social Security web site. After downloading the 12 meg .pdf and going to page 22 the historic quote had finally been found! (page in .html)(easier to download)
The document was actually minutes to the Senate Finance committee from January 30, 1935, before the Social Security Act was passed in August of 1935. In the minutes an excerpt from the "Diamond Life Bulletin of 1934" quotes a study of 20,000 men by the American Banker's Association.
Needless to say, much has changed with retirement income since 1935. Not only was Social Security enacted, which of course is a financial time bomb for those born after 1960, but since 1935 most corporations have implemented pension plans for employees, and people have access to 401K savings plans, IRAs, Roth IRAs, and tax advantaged annuities. Also noted in the report was that there was very low property ownership, which is not the case today.
It is amazing, yet not surprising, that Amway Quixtar distributors continue to repeat the same old scare tactic lines from an 80+ year old study to attract participants to their scheme. When the basic financial infrastructure for retirees has changed so dramatically, it is simply amazing they cling to the outdated data of this urban legend. The 20,000 people used in the study were all born before the American civil war!
Data from the IRS suggest that this common myth of Amway and Quixtar distributors is very untrue 80+ years later. The data show that 50% of all retires have incomes greater than $20,000, and 20% have incomes greater than $40,000. About 5% had incomes over $100,000/per year. If any income under $100,000/year classifies you as "broke", then the distributors' claims are true.
It is rather ironic that IBOs propose the solution to the retirement income problem be that people participate in yet another pyramid scheme (Quixtar) since the grand daddy of them all Social Security doesn't seem to meet their likings!
Here is the actual text from the 1935 Senate Finance committee hearing:
[Reprinted from The Diamond Life Bulletin Service (1934 monthly bulletins) published by the National Life Underwriters, 420 East Fourth Street, Cincinnati, Ohio]