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Nearly 40% Of Americans Live Paycheck To Paycheck

Thursday, August 2, 2012 - 8:31 AM
A new report by the Consumer Federation of America found that two in five American households live paycheck to paycheck—that means no savings, retirement account or emergency fund.

http://www.thefiscaltimes.com/Art....aspx#page
2
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,212
1. Thursday, August 2, 2012 - 10:58 AM
If you want to see how true this is just read all those Tweets from people terrified that they may lose their Social Security when they need it.  It seems to be "all" they expect to live on!  I am grateful for Social Security but it was never meant to be our entire retirement program!   I thought Americans had more sense than this.  I guess not enough of them read DepositsOnline.
1
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
2. Thursday, August 2, 2012 - 12:04 PM
There are at least three factors that contribute to this result (if it has some fidelity):

1. The American life style: spend while one can/have; with credit lines as one's additional asset to spend more.

2. The two recent Bull (i.e., stealth Big Bear:D) markets and seemingly profitable real estate markets tricked most investors who were both greedy and naiive; they either become poor or delay their retirement significantly or both.

3. The Government implemented the "smart" near-zero-interest policy for the past 4-5 years, whcih sucked dry the remaining few cents people could have earned. 

Recommended approach:

1. Change life style by forced/automatic savings via salary direct deposit and 401K (the formal to gather emergency savings, kids' education expenses, etc.  The latter to catch up on retirement.

2. Be prudent on investment; not overly aggressive or overly conservative.  Hint: have a strategy that fits one's risk tolerance and time horizon.

3. Be innovative and adaptive on near-term savings; earning realisitc income (e.g., 2-3% APY).

 
5
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
3. Thursday, August 2, 2012 - 12:53 PM
Of course it doesn't help that "incomes for 90% of Americans have been stagnant for at least 30 years".

How the middle class became the underclass - Feb. 16, 2011
2
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,212
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