Wednesday, May 27, 2015

Americans Feeling Better But Saving Too Little ... By Our Actions and Inactions, We're Unfairly Burdening Future Generations of Americans

Americans are feeling better about the economic situation these days. That's good news.

However, Americans are saving little if any money for a rainy day, let alone providing adequately for our oldster years. That's bad news for future generations of Americans.

Americans Feeling Better About Household Finances summarizes the Federal Reserve's key findings:

"Americans are feeling better about their household finances but many remain on shaky ground when it comes to saving for emergency expenses and retirement, according to a Federal Reserve survey.

A total of 65% of respondents in the Fed’s 2014 Survey of Household Economics and Decisionmaking said they were “living comfortably” or “doing okay,” up from 62% in the 2013 survey, the central bank said Wednesday. Some 29% in 2014 said they expected their income to be higher in the next year, up from 21% a year earlier.

Some 29% in last year’s survey said they were better off financially than they were a year earlier, compared with 21% who said they were worse off. A total of 40% said they were better off than they were five years ago, versus 28% who said they were worse off compared with 2009.

But for many Americans, household finances remain fragile: 47% said they wouldn’t be able to cover a $400 emergency expense or would have to borrow money or sell something, and 31% said they went without some form of medical care in the last year because they couldn’t afford it.

One in five said their spending exceeded their income over the last year, just 63% said they saved any money at all over the past 12 months and 31% of nonretirees said they had no retirement savings or pension.

“The survey results reveal a lack of economic preparedness among many adults,” the Fed said in a news release."

Summing Up

I would say Amen to the 'lack of economic preparedness among many adults' comment by the Fed.

We like to think of ourselves as independent individuals and not government dependent debtors.

Looking at the reality of the situation, however, most of us are merely talking the talk and not  making enough of an effort to walk the walk.

By not saving and investing properly for the long haul, we're only burdening the future generations by not taking care of our own 'future business' during the working years.

That's my take.

Thanks. Bob.

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