« This is Funny | Main | Jonathan Clements on Immediate Annuities »
Why Americans Don’t Save
By JLP | April 7, 2006
We all know the numbers. Americans simply aren’t saving enough for their futures. Jeff Brown at the Philadelphia Inquirer wrote about this the other day. He said something in his article about why the problem is as big as it is:
“There are lots of causes. Many working people aren’t making enough to set aside significant amounts. Also, driving a nice car is a status symbol; having a plump IRA is not.”
This is something I have been saying all along. I would be willing to bet that if MOST Americans were to take a serious look at their finances, they COULD find money to invest. Of course, it might require them giving up some of the luxuries they desire, but I’m sure they could find money to invest. The question is: will they do it?
Anyway, the article is a good read. It just emphasizes what personal finance bloggers already know.
Topics: Retirement Planning | 9 Comments »
April 7th, 2006 at 9:54 am
It’s a similar situation in the UK at the moment. It has been suggested that most people under 25 face retirement in poverty if they don’t begin to save or invest more.
I agree with you entirely, most people could afford to put more away, it might mean a sacrifice here and there but it is possible.
But for those who struggle with their finances there aren’t many (if any) where they can go and get free advice as to how to save and where to put their savings etc.
April 7th, 2006 at 10:08 am
Two words: Social Security.
April 7th, 2006 at 11:04 am
There aren’t many good excuses for people not to save. I believe we have the worlds seconds highest per capita income in the world. Too many people are spending above their means. I think having a plump ira is a status symbol in the pf blogger world…
April 7th, 2006 at 11:20 am
When I retire, I may be forced to leave my beloved U.S. of A., because the majority of the populace will want to get their hands on my savings to pay for their social security benefits. It’s a sad sad thing … We are coming to a point where this is unavoidable, since 50% of the people pay almost 100% of federal taxes. Once this reaches 51%, tax reform will not be possible. How do we get our country back?
April 7th, 2006 at 3:29 pm
I agree, it’s all a matter of priorities. People must choose to save their money instead of spending it on non-necessities. I just wrote about this topic.
April 7th, 2006 at 4:04 pm
Save??? What a silly idea! There’s always tomorrow, especially when I want what I want … and I want it NOW! And there’s always the plastic. We are a society of consumption, just look at the average credit card debt. Delayed gratification? who needs it! I am very worried. And I’m disgusted with Congress and the way it has spent any Social Security surplus. It’s mostly gone. Great example of failure to serve the nation’s citizens.
April 7th, 2006 at 4:32 pm
I share some of the same concerns as Vlad. Are the people that are saving for their retirement going to be forced to pay for those that aren’t saving? Or are we going to force our children and grandchildren to finance our comfy retirements through intergenerational transfers? Unlike Vlad, I don’t have another country to flee to.
April 9th, 2006 at 12:41 am
Over here in Malaysia, the introduction of lifetime-waived-annual-fee credit cards, the 9-years car loan (hire and purchase) being the order of the day, and various other “attractive” borrowing instrutments from the bank, it is definitely making the average consumers spend more of their future’s money and throw aside their responsibilities they have for their own retirement.
We have Employee’s Pension Fund (EPF), but it’s barely enough, with the statistics telling us 70% percent of pensioners gobbled up their entire EPF in just 3 years of their retiring life.
April 9th, 2006 at 10:13 pm
Weekly Roundup – 04/07/06
Another week, another weekly roundup… I’m a bit late this time, as I’m out of town and writing this from a hotel room. Anyway, here are some articles from the MoneyBlogNetwork and beyond that caught my eye this past week. Be sure to s…