Are Americans completely out of touch with reality?
Six out of 10 middle-class Americans say their chief financial concern is "paying the monthly bills," according to the latest Wells Fargo Middle Class Retirement study. That's up from 52 percent last year.
Paying bills is important, so I'm not surprised it's a top day-to-day concern. But this finding struck me as incomprehensible: 42 percent of middle class Americans say it's impossible to save for retirement and pay the bills. Really?
Fully a third plan to work until "at least 80" because they don't expect to have enough saved.
How many 80-year-olds do you know in the workforce?
Most of those surveyed -- 877 out of 1,000 people -- were between ages 30 and 75 and earning somewhere from $50,000 to $99,999 or had investable assets of $25,000 to $99,999.
We're talking about people who have or make decent money.
The study also revealed that people suffered both fear of the stock market and apathy about investing:
- 52 percent are afraid of investing in the stock market because of its volatility.
- 51 percent overall say they have "little interest in learning about investing."
- Among those with little interest in investing, 60 percent are in their 50s and 60s.
Is it possible for middle-class Americans to pay their bills and save for retirement?
"In general, the best way to assess their situation is to develop a budget and a plan for saving," says Laurie Nordquist, head of Wells Fargo Institutional Retirement and Trust. "Working with a budget and a plan for saving for retirement provides the roadmap. In our survey, we saw that across income levels, those with a plan saved three times more than those without."
On the same planet but in a different world
As I was pondering our nation's apparent lack of interest in retirement planning, I heard a piece on NPR Friday morning about what poor people in Africa do with money that is sent to them directly. Do they squander it on tobacco, alcohol and gambling, or do they invest it in something worthwhile? The story by David Kestenbaum opened with an interview of Kenya's Bernard Omondi, who had expressed delight after receiving $1,000 in cash -- "roughly what he might have made from a year of work."
A study by Innovations for Poverty Action found that recipients of money used it toward better food, health care and their children's education. Some invested it in a small business or bought cows. The study found that getting money reduced stress levels among the poor.
I wonder why Americans are so stressed out about their bills. A thousand dollars can do so much to boost the quality of life for indigent people. But here in the land of opportunity, many people find it impossible to set aside 10 percent or more of their relatively generous incomes toward retirement.
Do you find this unfathomable?
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Barbara Whelehan is a co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters. It is available at Amazon, Barnes & Noble, iBookstore and other e-book retailers.