Our Current Economic Instability
If you’re worried about the state of your finances, employment, or debt then you’re not alone. According to a recent Gallup poll, 69% of Americans’ number one concern is the economy.
- lack of job creation (6%)
- outsourcing of jobs to other countries (6%)
- continuing economic decline and instability (10%)
- the growing federal deficit (15%)
- unemployment (26%)
With all the problems the private sector faces, the public sector isn’t helping. That’s partly because government spending is growing faster than the entire private sector that supports it. According to Forbes magazine, the rising rate of government spending is 50% higher than the growth of our Gross Domestic Product. That’s not a path to a sustainable economic future.
Even when bright spots appear, like a lower unemployment rate, it is often due to fewer people in the job market, rather than the result of having more people employed. Nearly six million fewer people are employed today than just four years ago. So many people unemployed combined with a lack of existing jobs have made things next to impossible to turn around. In order to get American employment back to 2007 levels, we would have to create about 200,000 jobs per month, every month, for nearly three straight years!
Concern for the Future.
How many people are ready and able to retire at 65? Some believe that the new retirement age is closer to 80, because we simply do not have the means to sustain a retirement. Like most Americans, the vast majority of the baby boomer generation has not saved enough money for retirement.
Even if you’ve planned ahead and have saved $1 million to have in the bank for the day that you retire, you will have a difficult time living off its interest. Banks will insult you with less than a 1% return on your money. Your $1 million will give you only $833.34 a month in return. Sure, you could use the saved money to supplement your income, but then you’ll be earning less and less interest.
Of course, that’s a best case scenario. The average savings in America is only about $88,000 which will not give you much of a retirement. Even worse, according to the Employee Benefits Research Institute, roughly 28% of today’s retirees have less than $1,000 in savings, total.
This lack of assets is troubling, because these days our own personal savings and investments are more important than ever. If you are planning on relying on Social Security as your principal means of support during retirement, you will have to make due with only about $1,200.00 per month. Could you survive on that now? How about 5, 10, or 20 years from now with the threat of inflation, rising energy costs, and further economic instability?
What can you do?
Bottom line, if you don’t have enough equity, assets, or savings, you need to find a steady source of additional revenue. Supplementing your current earnings can ensure that you’ll both provide for the current lifestyle and future retirement that you deserve.