Saving First And Paying Cash

Starting with the savings and loan crisis of the 1980’s, baby boomers, a generation born between 1945-1964, made many avoidable mistakes regarding economic decisions. Although the economy is always fluctuating, the onset of the baby boomers’ adulthood caused a downward spiral and the actions of Millennials aren’t helping. As the Huffington Post demonstrates, older generations are quick to judge, blaming the economy on Millennials and Generation Yers. On the other hand Newsweek, a more credible news site, shows that had generations before planned for the long term, Millennials wouldn’t have made this transition in the first place. By turning into a more “shared economy,” meaning buying things used and renting, big corporations are taking serious hits, causing them to layoff people and raise prices. Furthermore, the generational differences in ideals and behavior are also contributing to the distress. Although many would argue that these generational differences are common throughout the ages, they are further hurting an already weak economy.

The majority of people age 65 or older in the United States are still working in full time positions. This opens the question if they planned for retirement, or what if anything went wrong while working? How do they feel about still having to work? Have they taken proper steps in preparing for retirement? Are they only working to pass time? These are the questions that everyone should be asking themselves about their own retirement plans, and what they have done to financially prepare for that stage in their life.

Social Security was introduced into law by Democratic President Franklin D. Roosevelt. Social Security was a program which would provide financial protection to our most elderly of citizens. The program over the course of time has evolved and added new branches of protection such as child, survivor, and dependent benefits. Social Security was never created to be an answer for a comprehensive retirement package for people retiring. However in our current society with plastic cards and increasing debit to income limits, many people do not save for the future. Many citizens live for today and expect the government to take care of them when they are old and cannot fend for themselves. In 2011 the first wave of baby boomers began reaching retirement age and in turn qualifies them to begin drawing from the Social Security System. The baby boom generation makes up 25 percent of the total United States population (SSA, 2014). The projected number of people from 2011 to 2030 who will become eligible to receive Old-Age benefits from the Social Security Act will increase by 65 percent (SSA, 2014). This data is crucial in terms of determining the stability of a system that relies on the paying masses to care for the elderly few. Many Presidents in the last two decades have created and formed elaborate panels of specialized individuals to tackle the problem of the long term sustainability of the Social Security System. In order to take care of our most elderly

In the time between the end of World War II and the early 2000s, the ways consumers used debt changed significantly. However, one thing remained clear, borrowing became the new lifestyle that most Americans adopted. Borrowing allowed the average working and middle class person to purchase homes and the items that filled their interiors. It also became the fuel to a resurrecting economy. The trust between borrowers and lenders has encouraged the stimulation of the economy. Because of this, debt has played a crucial role in American history.

In a recent find, the whole financial system that was created to keep the lives of normal everyday citizens like you and I afloat, will be absolutely dismantled by the “Baby Boomers” this age group would have drained almost all of the financial resources available in the Social Security System by the time the 2030’s arrives. With that there will be clouds of doubt cascading upon the lives of everyday middle class Americans moving forward especially with the Millennials, out of all the age groups they are viewed as being less optimistic of the financial future, and who can blame them? As evident in the article written by David Bass “The Millennial Perspective” he noted in a recent Pew Research report that 72 percent of Millennials don't believe

Looking for a financial planner, who could comprehend your requirement objectives? We assure to be the best. http://www.squamlakesfinancial.com/

Before the causes and resolutions are discussed, debt must be understood. Terry Herman, a financial advisor for Edward Jones, expresses this definition: “Simply put, debt is a product bought or a service utilized that you still have a financial obligation to” (Herman). To further that definition, debt is the borrowing of money with the entitlement of repayment with interest; this explains the financial obligation Herman expressed. While family members and friends may not enforce interest, interest would not demean the situation. The current consumer-driven culture has significantly increased the amount of personal debt from decades ago. A chart derived from statistics collected by the Federal Reserve and Bureau of Labor Statistics displays the climb of debt from $1,186 per person in 1948 to $10,168 in 2010 (Indiviglio). As shown, the increase over 62 years is approaching a factor by the multiple of nine. Consumers are clearly spending irresponsibly, which Herman manipulated into the “complete difference between an investment and expenditure” (Herman). An investment is something expected to obtain an additional value while an expenditure is unnecessary spending. Thus, consumers must be acquiring expenditures more frequently than investments.

Despite the $5.5 trillion invested in retirement and savings plans, many Americans are primed for a lower standard of living during their golden years. Since Social Security and defined benefit plans are becoming a thing of the past, Americans are relying heavily on their own investments later in life. Defined benefit plans have given way for the rise of 401k and IRA plans which are defined by contributions of the individual. Employee sponsored programs in 401ks have been flocked to for their flexibility, tax efficiency and high contribution limits when compared to other retirement accounts.

A major change that has transpired in America is the growth in consumer debts. Consumer debts have grown exponentially over the last decades due to the elimination of price controls that were once used by lenders to extend credit to consumers. “The elimination of those price controls changed the nature of consumer lending and consumer borrowing by providing an extraordinary profit opportunity to financial institutions and enhanced purchasing power to borrowers” (Lander 202). Whereas in the past, borrowing was done as a strategy for survival and used as a method for financial advancement, in recent times buying on credit and acquiring debts aimed at purchasing products for indulgence have become customary. Some feel that a consequence of this change has caused a substantial increase in consumer debts. On the other hand, others feel quite differently and believe that consumer debts are growing because of the inflation associated with the cost of necessities and the decrease in individual and family incomes. Per Christian E. Weller, a senior fellow at the Center for American Progress, “Data suggests that the run-up of debt is more of a consequence of economic necessities than of profligate spending” (583). Why are Americans going into debt more today than they did yesteryear? Despite the harm debts are causing the American society, Americans are going deeper into debts because of high interest rate loans and credit

A failing Social Security Retirement program glimmers like broken glass on the horizon. Unfortunately, many people are relying on this program for their approaching retirement needs and by doing so add uncertainty within their future. Misconceptions pertaining to the program are widespread, and require further examination. Two questions may single out whether one has a false impression of the role of Social Security and retirement. First, was Social Security meant to be the only source of an individual’s income, and second, are the taxes paid today saved exclusively for an individual’s future retirement? According to a brochure from Social Security Online, (Understanding The Benefits, 2010) the answer to both questions is no, therefore

6). Interestingly enough, in a study by Pew Charitable Trusts (2015), 69 percent of Americans, when asked about nonmortgage debt, say although they prefer not to have debt, it is a necessity in their lives. Similarly, 68 percent of Americans said they would not have been able to make purchases or investments with just their income or savings alone yet loans and credit cards allowed them to do this (p. 8). Beyond “rainy day” savings, “…more than half of all American households lack sufficient retirement savings to maintain pre-retirement lifestyles, even if family members continue to work until age 65” ( Wuorio, 2015, para. 3). This paper examines where many American families are financially, why a majority of Americans struggle with saving money, and what changes should take place in order strengthen financial security and develop healthy spending habits.

A retirement crisis can be seen looming on the horizon. Countless financial writers have interviewed analysts and actuaries documenting studies showing a large percentage of American workers will be financially unprepared for retirement. The effects will be devastating for an aging population facing increasing life expectancies. The cost to the U.S. economy and to those still working to support the financially

Thus, younger households will have lower income and assets, and borrow more in the beginning stages of the life-cycle, while middle-aged households and pre-retirees will increase savings and reduce liabilities when entering the later stages of life. However, as compared to the pre-retirees of 1995 and 2004, the 2013 pre-retiree’s total debt-to-total assets ratio exceeds the 1995 cohort, but is much lower than the 2004 cohort. For every dollar of assets, the 2013 pre-retirees had $0.84 of debt.

Planning for retirement should not be based on Social Security alone, but rather by saving portions of personal earned wages and putting finances into long-term investments. Depending on Social Security as the only income after retiring is an unsafe and undependable way to prepare for retirement. People who contribute to Social Security are mandatorily putting money into the Social Security Reserve; this money is used for older generations that will file for these benefits before the younger people working, in the early 21 century, ever receive a chance. Money controlled by other’s hands will never be a guarantee for a secure future, yet money saved by an individual to put toward personal goals will reward greatly. By taking the time to

With the average life span increasing, many people are certain to live 30 years or more after retirement. This factor calls for serious concern with retirement. With this in mind, we should therefore be worried, amid the growing uncertainty about financial security when retired. Another concern should be whether goals provide security for spouse and family. This means planning for retirement is more important than ever.