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The numbers do not lie.
- Almost 1/2 of all Americans have less than $10,000 saved for retirement.
- 83% of all US Stocks are in the hands of the wealthiest 1% of American people.
- For the 1st time EVER, Banks own more residential homes than all other Americans put together.
- Over 1 in 5 Children are living below the poverty level, the highest level in 20 years!
- Only the top 5% of households have earned enough additional income since 1975 to stay in line with housing costs.
This article points out a few more interesting statistics about the struggle of the middle class, which is slowly fading. As a 28 year old, I am more worried about retirement. Will Social Security be around for my generation? How much will I have to earn, and save, in order to retire comfortably? Pension funds, will these completely die out by the time I retire?
I've seen a lot of news articles lately discussing Government spending, the deficits, and drastic cuts that are just around the corner. Some of these cuts include the following:
- Raising the retirement age required to draw off Social Security. By the time my generation retires, will the new retirement age be 85?
- Drastically reduce personnel costs in the government, specifically the military, such as charging veterans more for medical benefits and cutting retirements. Some discussions include bonuses/incentives to service members with fewer than 20 years of service to separate early and avoid paying full retirements. Will current service members receive the same retirement benefits in 20-30 years as current retirees? Or will my generation of military veterans see lower benefits than previous generations?
I've done the math, and at my age, I will need to save an average of $50,000 per year (2010 USD value) for the next 25 years to retire "comfortably." And by comfortable, I assume Social Security is gone, medical insurance costs increase with inflation (likely they will be higher), and I am able to live off of 50% of my previously earned disposable income levels.
Saving $50,000/year is not easy. For most families, it definitely means dual incomes and a very strict savings/investment plan. So my advice to everyone out there, especially younger Americans, is to SAVE, SAVE, SAVE. Figure out the bear minimum you can survive off of, and do not overextend yourself with debt. The sooner you pay off your debts and get your savings/investments producing interest income to supplement your income the better. It can be done, but it will require our generation to be disciplined and smart when it comes to our finances.
Good luck everyone. Assume the worse, and hope for the best.
