Saving becomes a campaign issue

Source: LT

Almost 1 in 2 workers -- 48% -- has less than $25,000 in savings, and 71% have less than $100,000, according to a 2007 survey by the Employee Benefit Research Institute.

On top of that, more than 75 million Americans, or about half the workforce, have no opportunity to participate in a retirement plan. Experts say many of them are headed for a bleak future.



Read more: http://www.latimes.com/business/la-fi-savings27jan27,1,828996.story?ctrack=2&cset=true

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What's in your wallet?

one might think saving is good, and that banks and so forth would reward you for depositing your money with them.
that would be false thinking however, as we watch our savings accounts and CD interest diving for the floor.

banks do not want your money, they want people who max out credit cards because of greed and gimmeness, then get stuck with high penalty fees when they find out credit cards are a loan, not a free gift.

does a bank care if the interest they pay you is less than the inflation rate? no, because bank senior management is rolling in millions and there is no penalty to them if they drive the bank into the ground. a handy dandy bailout at taxpayer expense is right around the corner, thanks to dems and repubs in congress.

and you get...ta da...maybe $600 of YOUR OWN MONEY back. gee thanks.

Msongs

which is another way savings is punished.

The average working person (and rich person) pays pays the highest taxes on income from work and savings and lowest on capital gains and dividends.

It's no surprise we have an economy where making money from money gives you power, and working hard and being prudent gets you a rusty bucket of nails.

Because our leaders have trashed our wealth. They have taken our wealth and pissed it away.

People don't save because there is no point in it. What you do save stands a good chance of being devalued by actions taken by the very people who are encouraging you to save - so that they can have a source of wealth to piss away!

The future is here. Now. For many.

Why would anyone keep worthless dollars in any sort of savings?

......it's "better" than I'd thought. I wonder how this squares with other stats I've read, but the picture must change much for the worse when debt is factored in.

This f'ed up government makes it as difficult as possible to save for retirement. I was just figuring out my taxes. I gave up a crappy $20 an hour job at a non-profit in which I was covered by a very meager 401(k) plan in March of last year. I left that job for a better paying contract-to-hire position. I was hired on full time in the fall. Since I am not eligible for the 401(k) plan until 2009 (Did I mention the company I work for is owned by a tight-ass, conservative SOB?), I wanted to put the max $4,000 in my IRA to mitigate my taxes because the thought of giving this regime more of my money than I have to makes me puke. It would be a stretch for me to save that $4,000 by April 15th, but I budgeted for it and made it work.

So, because I made more than $52k in 2007 and was covered by a 401(k) for those three months, I would only be eligible for a tax break on ~$850 of the $4,000. I WAS LIVID!! STILL AM! What is my incentive to save?! I'm almost 45 and have less than $100,000 in my IRA. I know I will be working until the day I die, so if I'm not getting a tax break on my savings, why should I bother?

Sorry, I'm just sick and disgusted right now.

and now it is at 4.30 - so why don't people save - they made more money flipping houses and now the congress critters want to save that ATM of theirs

52% of workers have at least 25k in savings? and 29% have over 100k? Not counting my boss, that doesn't include anyone I know. I would have expected much worse.

by the federal Bureau of Economic Analysis or BEA in June 2006?

"The official definition of what an economist calls "savings," according to the federal Bureau of Economic Analysis, or BEA, is "disposable personal income less personal outlays."

In other words, add up everyone's after-tax income and subtract everyone's expenses. The amount leftover is the national savings rate.

According to the BEA, the national annual savings rate fell in 2005 to its lowest point since the Great Depression: negative 0.4 percent. Since then, it has continued to fall, registering at negative 1.6 percent in May 2006 and negative 1.5 percent in June. Compare those numbers with 1985 when the national savings rate hit a record 11.1 percent and it's clear why economists are raising the warning flag."

http://www.bankrate.com/brm/news/pf/YIRguide06-07/nov06_checking_saving_negative_a1.asp

So how come 52% of workers have at least $25k in savings and 29% have over $100k? Perhaps they saved that money in previous years and, since the savings rate is negative, they are drawing from those accounts to pay expenses.

Here is what the BEA has to say:

"Personal saving is the amount left over from disposable personal income after expenditures on personal consumption, interest, and net current transfer payments. This amount is available to acquire financial assets such as bank deposits and mutual funds, to use toward acquiring a home, or to reduce liabilities by repaying principle on mortgages or consumer debt.

If expenditures on personal consumption, interest, and net current transfers exceed disposable personal income in a quarter, personal saving will be negative. This can occur because current income is not the only possible source of funds for consumption expenditures. Although spending must eventually fall back into line with income, households can spend more than their after-tax income for a time by withdrawing deposits saved in previous periods, by selling financial or tangible assets, or by borrowing. Indeed, an individual household’s saving is unlikely to be positive over the short run when it makes a major purchase of a consumer durable good such as an automobile, and even at the aggregate level, personal saving may fluctuate in periods when an unusually high number of households make such purchases."

http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/std_adp.php?p_faqid=65&p_created=1133814477&p_sid=Jm25cPWi&p_lva=&p_sp=cF9zcmNoPSZwX3NvcnRfYnk9JnBfZ3JpZHNvcnQ9JnBfcm93X2NudD0zODUmcF9wcm9kcz0mcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3NlYXJjaF90eXBlPWFuc3dlcnMuc2VhcmNoX25sJnBfcGFnZT0x&p_li=&p_topview=1

After tax income might be after the money going into retirement accounts.

because we're paying off our kids' student loans. Between the 2 of them, it's costing us over $750 a month.

We can't even deduct the interest on them, because the loans are in our kids' names, not ours.

Yeah, I know, the kids should be paying the loans themselves. But one is 5 credits shy of her BA and works as a very low-paid junior social worker. The other just got diagnosed with an anxiety disorder and seems to finally be getting her act together, working (low pay) at a day care center and attending community college.

My son did that and got his entire tuition paid for. My daughter did that and went thru graduate school free. And I have known others who have done the same thing. Most recently, I have a friend, in her early 50s, who never went to college. She got a job raising money for a local college and is now working toward her BA! It's worth checking out!

Good luck to all...

Duh! If they don't have a job or keep having to take pay cuts, they won't be able to save.

http://www.youtube.com/watch?v=UhLBSLLIhUs
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http://www.youtube.com/watch?v=cLNOSGM2jK4
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http://www.youtube.com/watch?v=jgdrh2Bc95M
Lou Dobbs: Hillary Clinton's hypocrisy (part 2)