USA’s Retirement System Continues to Worsen

USA’s Retirement System Continues to Worsen

75% of Americans that are close to their retiring age have $30,000 or less in their retirement accounts. An average of $16,034 was saved for retirement for the poor Americans that is within the bracket of 50 to 60 years old.

Teresa Ghilarducci, an economics professor at The New School, said that America’s retirement system must be reexamined because the lack of savings might become an acute crisis for the nation.

Ghilarducci argued that the middle-class Americans were not satisfied by the recent model of retirement savings. According to her, the “do-it-yourself” system assumed that individuals that do not enough experience in investment can have the same results as the money managers and professional investors.

Furthermore, at least 8 times the annual income of Americans must be saved to maintain their lifestyle. Unfortunately, Ghilarducci estimates that almost half of middle-class men will have poverty-like conditions because they are not ready for retirement.

She advocates having compulsory retirement accounts for every American. This would be a supplement to other retirement accounts all Americans have. This mandatory account is not a replacement for the Social Security. Ghilarducci wants everyone to save more, that is aside from their Social Security.

Posted by James Fried on Tuesday August 07 2012, 3:29 AM EST. Ref: CNN. All trademarks acknowledged. Filed under Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0