An article posted on Marketwatch.com came through my Twitter feed today. It provides some startling statistics from a consumer finance survey conducted by the Federal Reserve.

“Analyzing data from the Federal Reserve’s sweeping Survey of Consumer Finances; Rhee concludes that 40% of people age 45 to 64—more than 18 million households—hold no assets at all in retirement savings accounts. And those that have them aren’t necessarily in a position to feel smug: Only 26% of those between 45 and 54 and 36% of those ages 55 to 64 have total savings greater than their current annual income.”-Market Watch

Take a second and read those statistics again. According to the Federal Reserve, more than half of the people approaching retirement don’t have anything set aside. This is a serious problem in our country especially considering the influx of baby boomers reaching retirement age. The article mentions that the “Silver lining” for some of those people is that many of them worked in jobs that had pension plans set up, but what about all the other people who are still working now and can’t rely on a hail Mary play to save them in the fourth quarter of their income producing game time? Employee pension plans are something that existed for railroad workers (and the like), and many jobs today don’t have plans like that. I would think that there are lots of people out there standing up and demanding answers to questions like: So what about the rest of us? What are we going to do about our retirement?

Well, unfortunately I did not write this article to try and answer that question nor do I think that I am really qualified to do so. I was merely exposing the frustration that many Americans are going through. Perhaps a more focused question that I can shed some light on is: how can we lower that staggering 40%? The solution lands in the realm of EDUCATION. One of the biggest reasons why people are suffering with retirement plans today is that they are not educated on what kinds of savings plans exist, what the difference between types of investments are, and where they can go to find honest advisors. The truth is that there a many things that someone can invest in right inside of their IRA: Stocks, ETFs, Real Estate, and even small businesses. Each of these investment types is best suited for different investors. The problem is that people don’t know how to fully utilize an IRA to maximize their returns in a way that fits their personal plans, needs, and strategies. If people were more educated on how to invest in things they wanted to (and understood) within an IRA, then there would be a lot less people struggling with having enough set aside for retirement.

 

For the full Market Watch article click here

Source: marketwatch.com http://blogs.marketwatch.com/encore/2013/06/21/tallying-the-retirement-account-have-nots/?link=sfmw