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Americans needs to save if they don?t want to die poor

Americans are living longer than ever. The average life span has reached 78 years, and if you pass 65, you can be pretty sure that you`ll live on for another 17 years, easily. And it`s even going to get better with technological advances like stem-cell research. So are Americans preparing for this new reality? The answer is a big fat No. During the last 30 years, levels of saving have gone down from 30% to less than 0%. And all the while people are expecting to retire on time at age 65 or earlier. And then, of course, to start the good life, the cruises, and the holidays.

But they will be in for a nasty surprise. At this point in time, the Social Security and Medicare are indebted for $11 trillion, and no one to pay to skip in. Even at its beginnings, the social security was never meant to finance a golden retirement for an ageing population. To be fair, the ones approaching retirement anytime soon have managed to save about $180,000 as nest egg. But even though a healthy sum, it`s far away from being enough to provide for an enjoyable retirement. $180,000 produces not more than $750 a month, hardly a Blanc cheque for the good life.

The solution is to save more. To bring down the fixed costs, to bring down your housing costs, and to start saving. At the moment, a return on money at a 9 percent rate is still achievable but as general levels of savings rise, this rate will lower. Let`s not forget: the future is worth just as much as the presence.