Saving America

America is in danger, and it’s not a foreign power that is the worry nor is it any sort of natural disaster. It’s a shortfall in savings that is setting many folks up for a dystopian future.

 

When it comes to saving money for unforeseen emergency expenses, many folks in the United States of America are woefully underprepared.  According to the Federal Reserve, the average personal savings rate in America is just over half of what people should be putting away. The recommended percentage to be saved is 10 percent of one’s annual income, but the average person in the U.S. is putting away just over 5 percent

And it is getting progressively worse as time goes by. In 1985, Americans were comfortably hitting the 10 percent goal, and in 1975 we were at a record of over 17 percent of income.

This lack of saving puts the dream of retiring at risk. A 2018 Retirement Savings survey found that 42 percent of Americans have less than $10,000 saved. A staggering 14 percent of that group of people has absolutely nothing saved at all for their future. This means that over 1 in 10 Americans has nothing at all set aside for their later years and are going to retire broke.

Americans are not only in trouble in the future. This lack of savings also leaves them unable to deal with emergencies. 20 percent of people faced with a financial emergency would put it on a credit card, and pay it off over time. Only 39 percent would be able to deal with a financial blow of $1000.

The other troubling issue is the cost of medical treatment and recovery. Money worries are forcing people to put their health in jeopardy. [4] A report on the Economic Well-Being of U.S. Households by the Federal Reserve shows that a quarter of Americans surveyed skipped medical treatment because they were concerned about being able to pay for it.

Without a savings plan, many Americans could be facing a tough future. That dream of enjoying their “golden years” may become a tarnished nightmare. Hopefully, the statistics over the next few years will improve again. Speak to your financial adviser to work out a savings plan so hopefully, you can look to the future with confidence.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC