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The Retirement ‘Problem’ in the US is Nothing New

Unless you’ve been literally living in a cave somewhere, you probably already know that the United States is facing a dire situation when it comes to retirement, more specifically the fact that millions of baby boomers are spectacularly ill-prepared for their “golden years”.

The numbers are alarming, to say the least. Less than 60% of Americans are actually saving for retirement and, of those people, just over half have less than $25,000 put aside. More than 30% have less than $1000 set aside for their retirement!

It’s obvious that there is a retirement problem of the worst kind here in the United States but, frankly, it’s nothing new.

As a matter of fact, in some regards the retirement situation in the US  is better today than at any other time in modern history.

Consider this; up until the end of World War II, the average American worked until the end of their life because “retirement”, as a concept, hadn’t even been invented yet. Even during the 1950s, 60s and 70s, what most people think of as the “golden age” of retirement, twice as many men as today were still working during the typical retirement years. By the way, back in 1948, 25% of American families were dependent on the income of what today would be considered an “elderly” person, and nearly 70% of all men and women were living on less than $20 a week, which would be $193 today.

And lest you think that more people had private pensions back then, the fact is that only about 25% of men 65 or older actually had a pension that was providing them income in 1975, whereas during the 1990s it was closer to 40%. Even more interesting is that, in 1975, 15% of the income being reported by men 65 or older was from pensions while, in 2010, that figure was actually 20%!

That’s not to say that there isn’t a retirement crisis in this country today, because there most certainly is. Statistics show that the average American is completely unprepared for retirement and that the situation is only getting worse.

No, there is definitely a retirement crisis, but that fact is that there always has been a retirement crisis, ever since the concept of retirement was invented. Since Social Security came around, the average American has been reliant on it for income during their retirement years. That’s actually why it was invented, to give people a cushion of income in order to be able to survive once they stopped working, knowing that they wouldn’t have enough money to do it otherwise.

Too many people failed to plan outside of pensions and social security. Since the advent of the 401k in the early 1980’s there hasn’t been wide enough participation from the baby boomer group. In order to adequately retire you need to diversify and expand your investment portfolio. Look into blue chip and dividend paying stocks.  In any instance, you will need to do more than let the government or your previous employer take care of you. Since the economic collapse a few years ago we learned that they are unable to take care of themselves.

America has, in no uncertain terms, had a retirement crisis for decades.

The biggest question for everyone reading this blog article is simply this; do you want to be a part of the retirement problem, or are you willing to take the steps necessary to fund your retirement adequately so that, when you do stop working someday, you can keep living the lifestyle that you’ve become accustomed to?

That is something that every individual needs to answer for themselves.


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