One of the biggest concerns for any professional in the United States nowadays is related pension and experts are increasingly gloomy about their prospects in that regard. Experts now believe that the sort of retirement security that was enjoyed by earlier generations in the US is going to be a thing of the past and many Americans are now in danger of spending their old age in poverty. An investor education expert at the Financial Industry Regulatory Authority stated that people should start planning their retirement as soon as they start earning. The experts stated, “The minute you have a paying job, it’s a good idea to start thinking about retirement. One of the best ways to invest is a company-sponsored retirement plan like a 401(k). That’s a great way for younger people to get started.”
The data that has been made available by a range of reliable entities make for grim reading. Fidelity Investments revealed that the employee contribution on average was 8.8% of a person’s salary on average in the first quarter of the year. Employers’ contribution stood at 4.7% on average during the same quarter. However, the most vital take away from the whole thing is the fact that experts now believe that there are plenty of Americans who are not having a comfortable retirement fund. Northwestern Mutual, which is a financial services outfit, stated that 20% of the current working population in the country have not saved even $5000 towards their retirement fund. However, it is more alarming to note that as many as 15% do not have any savings to speak of.
While the situation with the retirement fund is bleak in itself, the earnings of many Americans sound problematic as well. The same Northwestern study has pointed out that as many as 33% of Americans would need to borrow money in order to meet their expenses if they go without three paycheques. It points to a situation in which a large percentage of Americans no longer have the sort of financial security that previous generations took for granted. People in their 20s often do not earn enough and neither do they have required skills to save enough. On top of that, many in that age group have huge student loans. That has also been cited as a major factor behind low savings. However, we can expect a substantial solution to this as IT behemoth Genpact is going to come up with finance and accounting solution partnering with OneSource Virtual and Deloitte.