By: Benedict Smythe
Submitted: 2008-08-07 14:53:59 | Word Count: 538
Around 37 of Americans do not know how much they need when they retire. A retirement survey revealed that half of the population has around $25000 in savings aside from the value of their home or pension insurance. These figures reveal that a big chunk of the population needs to find ways like George Foreman’s burger grills to have a comfortable life after retirement.
Today’s life is tougher with the rising costs for food, fuel, and health services. All these factors considered, the concept of comfortable retirement has been transforming. Retirement may mean working part time if necessary.
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One big factor in retirement is the amount of your savings. We can blame the consumerism around us. We work hard and we don’t save enough. That is the real picture. After World War 2, Americans had a greater amount of disposable income, and they spent what they can. The evolution in modern marketing transformed the buying habits of Americans. Savings were not the priority but the new television, that new gadget, that bigger home.
Decision towards saving money can also be related to generation gaps. In the 1940’s the saving rate was at 26.1 , last year it is at 0.4 . The decision making process of the baby boomers are toward a more comfortable lifestyle and not favoring savings. A lot of people right now realize that they need to save money, but the problem is that they realize this when they are already 50.
Savings Slayers
• Credit Cards despite the economic indicators American are still heavily using their plastics. An average American has a debt amounting to $8438 in revolving and non revolving credit not including the home loan. The US credit card debt is at $957 billion.
• Inflation. Concerns on the dwindling performance of the economy and inflation have prevented Americans to set their money for their retirement funds. Instead, people spend their money on rising costs of fuel, food, and housing.
• Changing Scenarios. People now tend to retire late due to policy changes on social services’ incentive and lesser options for pensions plans.
• Investing Fears. Savings involves an atmosphere of trust. Institutions must make a conscious plan to develop trust and teach people to be financially literate. They must know the risks that they can take to make their money grow.
• Mentality. Our generation is used to having money and spending that money. It’s that “cant live without money” attitude that is preventing a lot of people to save. You can start with small amount and before knowing it you can steadily grow it to a level where you know you will have enough.
Policy changes are being undertaken to improve social services toward retirees. The sector on insurance plans is also taking steps to encourage more people to save. Americans are starting to understand how an auto enrollment to a savings plan can do a lot for their future.
A lot of people may be working beyond 62 because they don’t have enough money to support their needs. Americans are starting to change attitude towards retirement because of the impact of economic changes. A bigger portion of the population is inquiring about saving some money. A new period of austerity and frugality might just paint us a better retirement picture.
