Frightening: Wealth Gap Widening Into Retirement
It truly is frightening. Seeing the wealth gap widening for millions of retirees.
The poor and middle class continue to struggle while the wealthy get wealthier. We see it all around us.
Working a traditional job with a 401(k) just isn’t cutting it.
Even when you do the “right” things like you were told, such as finish school, go to college, get a “good” job with benefits and a retirement plan, you still end up behind the 8-ball, always seeming to have to play catch-up. And NEVER getting ahead!
Even into so-called “retirement”, the wealth gap is growing frighteningly wider and wider. A recent article talked about this widening wealth gap:
William Kistler views retirement like someone tied to the tracks and watching a train coming. It’s looming and threatening, but there’s little he can do.
Kistler, a 63-year-old resident of Golden, Colorado, has been unable to build up a nest egg for himself and his wife with his modest salary at a nonprofit. He has saved little in a 401(k) over the past decade, after spending most of his working life self-employed. That puts him far behind many wealthier Americans approaching retirement.
“There is not enough to retire with,” he said. “It’s completely frightening, to tell you the truth. And I, like a lot of people, try not to think about it too much, which is actually a problem.”
With traditional pensions becoming rarer in the private sector, and lower-paid workers less likely to have access to an employer-provided retirement plan, there is a growing gulf in the retirement savings of the wealthy and people with lower incomes. That, experts say, could exacerbate an already widening wealth gap across America, as more than 70 million baby boomers head into retirement — many of them with skimpy reserves.
Because retirement savings are ever more closely tied to income, the widening gulf between the rich and those with less promises to continue — and perhaps worsen — after workers reach retirement age. That is likely to put pressure on government services and lead even more Americans to work well into what is supposed to be their golden years.
Increasingly, financial security for retirees reflects how much they have accumulated during their working career — things like 401(k) accounts, other savings and home equity.
Highly educated, dual income couples tend to do better under this system. The future looks bleaker for people with less education, lower incomes or health issues, as well as for single parents, said Karen Smith, a senior fellow at the Urban Institute, a Washington think tank.
“We do find rising inequality,” said Smith, who added that it’s a problem if those at the top are seeing disproportionate gains from economic growth.
This wealth gap is only going to continue to get worse. You hear it all the time. You or someone you know works all their lives only to run into a brick wall when they “retire”.
The money runs out, or they never were able to build any savings to speak of to begin with. Prices for everything goes up along with taxes.
From the article, “The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%—And That’s Made the U.S. Less Secure“…
…..the elephant in the room is extreme income inequality.
How big is this elephant? A staggering $50 trillion. That is how much the upward redistribution of income has cost American workers over the past several decades.
Price and Edwards, of the RAND Corporation, calculate that the cumulative tab for our four-decade-long experiment in radical inequality had grown to over $47 trillion from 1975 through 2018. At a recent pace of about $2.5 trillion a year, that number we estimate crossed the $50 trillion mark by early 2020.
Since 1975, the wealthiest Americans, particularly those in the top 1 percent and 0.1 percent, have managed to capture an ever-larger share of our nation’s economic growth—in fact, almost all of it—their real incomes skyrocketing as the vast majority of Americans saw little if any gains. (See: https://time.com/5888024/50-trillion-income-inequality-america)
Does this sound like a good plan to you? Always trading your time for money? It doesn’t work.
And the wealthy don’t live that way. They do different things than regular folks and you should do the same.
(Do You Have Enough Money for Retirement?)
~Mike J Anthony