A new working paper published by the National Bureau of Economic Research, “Americans’ Financial Capability” surveyed nearly 1,500 Americans two summers ago, and highlighted some shocking trends illustrating the inability of many Americans to properly save for retirement.
We’ve included some of the findings:
– Half of Americans surveyed had trouble keeping up with their bills.
– Half of Americans surveyed had no money saved to cover their expenses in the event of loss of income.
– 23% surveyed used high-cost borrowing, such as a pawn shop, tax advance or payday loan.
– 58% have never tried to figure out how much to save for retirement. 51% of those 45-to-59 said the same.
– 17% of responders had no idea what they’ve invested in, when asked what was in their retirement accounts.
– One-third surveyed said they experienced a large and unexpected drop in income over the past year.
Many, many American consumers are experiencing unease and uncertainty in the market, and retirement age is approaching more quickly than you might think. A lack of education and a lack of motivation aren’t helping consumers invest with confidence or competency:
So who is to blame? “It’s hard to point a finger,” Prof. Lusardi says. “It takes two to tango. But it’s certainly true that this economy in the past 10 years has made it very difficult for people to make decisions. We’ve shifted the responsibility to individuals and they don’t have the capability to make those decisions. Still, some of the things we found in the survey are going to be with us for several years.”
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