Remember all those stories a few years back about how more than half of all Americans couldn’t afford to cover and emergency $400 expense? That reality is starting to run into more and more retirement plans.
After all, it can be very hard to save when you don’t have extra cash available to set aside.
By the numbers: A recent survey by Freedom Debt Relief found that more than 40% of Americans have $0 saved up for retirement, with the cost of everyday expenses cites as the number-one reason for not saving. Debt was another major reason, with credit card debt an issue for 46% of respondents, followed by mortgage debt at 41% and auto loan debt at 28%.
Think about this fact: As many as 78% of Americans are living paycheck to paycheck. If they miss a check, that means some bills don’t get paid.
Addressing that shortcoming is the first step in dealing with the retirement crises on the horizon.
Quote: “We need a wake-up call all the way around, and people need to engage in this and get more serious. It’s really important for us to make sure that we’re putting money away and saving because if we don’t save some money, we won’t have any to spend later.” — Chris Hogan, financial expert and author
The solution? It all comes down to managing debt. The fact that nearly 8 in 10 Americans has debt is really holding back what we can do to improve our financial standing, as is the finding from 2018 that 25% of people expect to die in debt. More than 40% of Americans don’t know when they’ll ever be able to pay off their debt and 65% don’t know if they can.
If that’s not bleak, I don’t know what is. It’s a growing crisis too, as U.S household debt recently reached a record of $13.67 trillion, nearly $1 trillion more than the last peak of $12.68 trillion, right on the heels of the financial crisis in 2008.
That’s the bad news. The good news is that we know what the enemy is, it’s debt. The next step is figuring out how to help millions of people to live by a budget so that they can start saving in earnest, in time for their own retirements.