Setting a certain amount of money aside for later use is no fun. Indeed, numbers don’t lie, a recent study conducted by GoBankingRates reveals that 69% of adults have less than $1,000 in the bank. A whopping 34% confessed to having zero savings in the bank.
This proves that Americans place little emphasis on savings. The trend deteriorates with age. Another intriguing study conducted by the National Bureau of Economic Research found that almost half of Americans die almost broke.
It’s unfortunate that 46% out of the general population’s retirees die with less than $10,000 in savings. The number increases to 57% for single retirees.
It gets worse when other assets like homes are taken into account. The figures are shocking when one considers housing equity. A total of 57% of single-adult households and 50% of widowed households had no housing equity. Dying broke is an indicator of an alarming degree of financial weaknesses in the retirement period. It also denies one’s heirs an inheritance. The eventuality of a medical or any other incident that has a significant bill demands financial resources, which need to be backed up by assets.
The GoBankingRates survey indicates that only 37% of seniors 65 and older claimed to have $1,000 or more in the bank. It’s also important for retirees to have an emergency fund in a bid to curb financial insecurity.
It’s very frustrating when an unexpected expense presents itself and one has no resources to meet them. Retirees are at a disadvantage since they don’t work. Working folks have the opportunity to earn more money that in turn takes care of their bills.
The absence of employment and savings leads retirees to take on debt in case an emergency presents itself. On average, seniors aged 65-years and older carry over $6,300 of credit card debt. Due to lack of liquid assets, retirees are often forced to resort to credit cards to cover the emergency cost.
It’s advisable for both working Americans and retirees to have three to six months’ worth of savings in their emergency fund. There’s also need for people to work on reducing unnecessary debts and luxuries. This can be done by creating a budget that lays out your current expenses and finds ways to cut minimize.
Never fear. All of the best authors and artists died penniless. In fact, a growing trend for baby boomers is espoused in the books titled "Live Rich" and "Die Broke". It's not a bad thing. The bad thing may be to die with money you never got to enjoy spending.