This article begins to explain how Americans aren't saving enough present day. The likelihood of running out of money during retirement is very high. Yes, they may have a large sum of money saved up, on average an average family will have about $104,000, to live the life that they are accustomed to living before retirement. In the article they suggests that working adults need to put more money aside in investments in order to be well supplied for retirement. In turn, they blame Wall Street for this struggle. But they are right. With Social Security funds pretty much disappearing then people are being forced to take the responsibility on their shoulders and invest and its inevitable. ""The goal: to get Americans to put their money in low-cost index funds." I agree.
http://www.nytimes.com/2015/03/04/business/americans-arent-saving-enough-for-retirement-but-one-change-could-help.html?ref=economy
5 comments:
...and social security is going to account for less and less of retirement as it goes insolvent. One conversation I've heard on this topic recommended that people start saving for retirement at 22 or their first full-time job out of college, and contribute 4 to 8% of each paycheck.
With the possible long-term failure of social security, the public policy direction of retirement accounting will be interesting as well. Will state/local governments pick up retirement funding if the federal SSA diminishes or becomes insolvent?
Americans have one of the lowest savings rate of the developed world. We are the beneficiaries of large foreign investments, so we dont feel the full impact our lack of saving leads to.
The importance of saving for ourselves will definitely be more important as the SS system is weighed down by the aging population/ We should introduce fiscal policies that encourage saving instead of consumption.
I think the government needs to step in at some point. I do not think it is fair at all that the people paying into SS right now are the ones who aren’t going to benefit from it. Especially considering that those tax dollars are decreasing their income and preventing them from saving for their own retirement themselves. I do not have a well thought out plan, because I understand that the baby boomers also paid into SS and deserve to benefit from it. Just as a thought, maybe the government could begin offering bonds or another security that are exclusive to retirement accounts and offer higher interest rates than the general market.
I think the reason americans arent saving enough is because they are too dependent on government support. And everything can be bought on credit is not exactly a good thing. if people live beyond their means, how can they save? In Vietnam, people know they are on their own, so they work hard, and save for their future. things they own are theirs. So i think American should have this kind of mentality in order to save more.
I do agree with Kevin when he says that it is not fair that the ones who are paying into social security right now are the ones who aren't going to receive its benefits. I also agree with Quynh. It does seem, to me, that Americans are too dependent on the government when it comes to saving. I wonder if more Americans would focus on saving for retirement if more retirement accounts were set up, with more benefits (encouraging them to save).
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