http://www.resourceshelf.com/2006/07/05/statistics-retirement-savings-by-the-numbers/
Statistics: Retirement Savings: by the Numbers
July 5, 2006 at 12:01 am · Filed under Business and economics, Social and cultural issues, Statistics, United States
New Research Report: Retirement Savings: by the Numbers
52 pages; PDF. From a summary:
Source: Securities Industry Association (SIA)
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Reports of how poorly Americans are preparing for retirement have understated this looming problem — and the situation is getting worse, according to a research report released today by the Securities Industry Association (SIA). Nearly half of American households are not saving at all; and two thirds are not saving enough to retire adequately. The SIA study, Retirement Savings: By The Numbers, examines both the causes for the decline in saving and the consequences.
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It’s a PDF so you can’t quote from it.
I r an injineer who worked in Wall Street’s IT. So, my interest is like a Renaissance Man, with some exposure to underside of Wall Street. I’m not an economics major, but I do have an MBA.
With those caveats, I would respectfully point out two, what are to me, glaring oversights.
Inflation! and, Taxes!
There is no doubt that they are correct that the US savings rate is nothing like it was for my parent’s and grandparent’s generation. They saved prodigiously. The question is that bad. Given that inflation robs 95% of the value of savings over 30 years, then one has to wonder if saving like that makes sense. Further, the tax bias against savings versus debt also begs the same question.
SO!
What options does the average Joe six pack have for retirement?
Depends upon your age?
There are really only two ages — prior to SoSick going broke and after it.
For the prior to age group, plan for it (the Social Security Insurance Ponzi scheme) and whine to the politicians if the even hint of reneging.
For the after age group, plan accordingly.
SO how does one preserve value in this economic scenario. Buy things that would retain value in financial catastrophe.
- Buy Real Estate! They ain’t printing no more of it.
- Buy real education that allows you to earn “more”! They can’t take what you learn away from you.
- Save prodigiously. Invest wisely. Maximize income. Minimize expenses. Reduce complexity. Shed things.
- Think outside of the box in savings. Not everything shows up in a traditional financial balance sheet. For example, a good car, well maintained, driven gently, while it financially depreciates, can be a store of value. For example, the Mormons stockpile a year’s food for the Rapture! That’s a store of value.
- Buy bullion coins.
- Buy collectibles, bearing in mind that this is very very tricky!
- Develop “side lines”. My example is Public School Principal who runs an eBay business. Combine a white collar education and blue collar skill.
- Surf the financial markets. Ride the waves up and try to avoid the down turns.
- Study history because it does repeat itself. Specifically, the German pre-WWII hyper inflation cause by the WWI reparations, the Great Depression caused by the Smoot Hawley tariff, and the American Dust Bowl migrations. Plan for a financial catastrophe and be pleasantly surprised if it doesn’t happen.
I think that people are rational in their responses. The failure to save for retirement, in a manner measurable by the Securities Industry Association, may only mean that people, adapting to the twin monsters of inflation and taxes, are “saving for retirement” in non-traditional fashion.
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