This isn’t a surprise. We are still in the midst of a lingering depression/recession. People need to get by and retirement for many is down the road in hopefully more prosperous times. Right now the kids need shoes and school clothes.
And remember 2/3 of folks have only saved SOMETHING for retirement. This isn’t to say that people are saving or have saved at an adequate level. As a former financial advisor I can tell you that most people, even people with some money, are woefully behind on savings. The people I saw who weren’t behind often benefited from inheritances or from land which was sold off during the real estate boom.
Then factor in net worth. Sure some people might have $50,000 or $100,000 sitting in a 401k but many folks are still underwater on their houses (and are likely to remain so at least for a good while longer) by at least this amount. Then factor in financed cars, credit cards, etc and the picture for many Americans is a good bit more bleak than even the headline suggests.
But this still isn’t the worst of it. Even though real estate continues to lag (in most areas, some areas have done pretty well over the last year or so) the price of everything else is rising. And with interest rates as low as they are, even if you do have some money to stick in a CD you’ll lose money as soon as you buy the certificate. That 1% yield isn’t going to keep pace with the price inflation which is bubbling up all over. Wealth is evaporating, thanks to the policies of our Federal Reserve.
If you have no money, well you’re in even worse shape. And many people in America, many middle class Americans, increasingly have no money to spare even for themselves.
(From The USA Today)
A third of people (36%) in the U.S. have nothing saved for retirement, a new survey shows.
In fact, 14% of people ages 65 and older have no retirement savings; 26% of those 50 to 64; 33%, 30 to 49; and 69%,18 to 29, according to the survey of 1,003 adults, conducted for Bankrate.com, a personal finance website.
“These numbers are very troubling because the burden for retirement savings is increasingly on us as individuals with each passing day,” says Greg McBride, chief financial analyst for Bankrate.com. “Regardless of your age, there is no better time than the present to start saving for your retirement. The key to a successful retirement is to save early and aggressively.”
Got to save aggressively and be a pretty savvy investor if one is going to keep pace with the debasing policies of the Fed. There may be a time when even that isn’t enough.
And I almost forgot the never ending tax burden. No way all the money which flows to Washington DC from our paychecks would be better deployed if we kept it and used it for savings, or investment, or for spending in our communities. Nope, running our money through a siphoning bureaucracy in DC is definitely the way to economic prosperity. Very efficient.
For more from Nick Sorrentino, please visit AgainstCronyCapitalism.org