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Today’s retirement savings …
In October 2017, the median retirement savings of Americans looked like this according to the Economic Policy Institute for those 56-61 years old … those nearing retirement for whom their median retirement savings were only $ 17,000 .
At that time, Americans were recovering from the 2008 recession. Now, as so many Americans have been affected by the COVID-19 pandemic, do you think those who are preparing to retire in the group? current age 56 to 61 have saved more?
Or did they have to dip into the retirement savings they had at the start of 2020?
Did Stimulus # 1, # 2 and Promised # 3 do anything to help this group be better prepared?
ANSWER: As of February 5, 2021, most had no retirement savings, “and those who did, had less than $ 21,000”.
Meanwhile, the 2021 dollar is only worth 93% of the purchasing power of the 2017 dollar.
Americans who could save stimulus dollars probably saved some, even if those dollars were also meant to stimulate the economy.
Median retirement savings today, taking into account the majority who “had no retirement savings”, continues to look very dismal.
Home and home?
Compounging the problem …
The retirement savings problem is certainly no less stressful when the compound interest on savings accounts is not even enough to keep pace with inflation!
With the prices of essential goods and services rising faster than interest on savings can add to those savings, there is little incentive to do more than hide the money under the mattress or spend it.
Not long ago the American people, by virtue of their government “of the people, by the people and for the people,” bailed out American banks. Even now, those same banks can borrow funds at almost zero percent interest, which they then lend in multiples of what those same banks pay retirees for interest on their retirement savings.
Even investing in retirement savings becomes riskier when those funds have to last for the life expectancy of a retiree.
Rising prices and falling savings have made today’s retirement “a race between bankruptcy and death”. With Americans not being able or unwilling to save for retirement, the future is a foreboding for a majority of the growing number of seniors in America.
In the past, the ‘nuclear family’ was what today’s elders might have depended on, but today many elders instead provide shelter and livelihoods for their children and grandchildren, because unemployment, student debt and possible evictions have seen future generations return to their lives. aging parents for support.
The political stalemate in Washington, DC has failed to address today’s pressing issues that an increasing number of seniors face with “too little, too late.”
© 2021 Demas W Jasper
Ann carr from South West England on February 22, 2021:
Similar situation here, because the interest on savings is low or nonexistent. As in the United States, young people are returning home or staying longer than before. The “mom and dad bank” is a common expression today.
We have the advantage of a national health system, but it becomes less generous, even though we have a good health service.
It’s hard to see how things will turn out but times will be tough for many I’m afraid. This time it’s a global thing, so I guess it depends on how good the system or government is in each country.
Hope you stay safe and healthy.
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