The New York Times has sounded the alarm. Word is getting out to the intellectuals. It is not getting out to the general public. Here is reality:
Here is something every non-rich American family should know: The odds are that you will run out of money in retirement.
On average, a typical working family in the anteroom of retirement — headed by somebody 55 to 64 years old — has only about $104,000 in retirement savings, according to the Federal Reserve’s Survey of Consumer Finances.
That’s not nearly enough. And the situation will only grow worse.
The Center for Retirement Research at Boston College estimates that more than half of all American households will not have enough retirement income to maintain the living standards they were accustomed to before retirement, even if the members of the household work until 65, two years longer than the average retirement age today.
Using a different, more complex model, the Employee Benefit Research Institute calculates that 83 percent of baby boomers and Generation Xers in the bottom fourth of the income distribution will eventually run short of money. Higher up on the income scale, people also face challenges: More than a quarter of those with incomes between the middle of the income distribution and the 75th percentile will probably run short.
The stock market since March 27, 2000, is flat, discounting for price inflation. The S&P 500 is where it was when it peaked. This means 15 years of nothing.
You can’t earn money in the stock market.
Your bank savings pays you nothing.
U.S. bonds pay a little over 2%. Basically, nothing.
Another recession is guaranteed.
You cannot save your way out of this black hole.
What are your plans? They had better involve working to at least 75. Maybe 80.
You had better stay in good health.
You had better be out of debt.