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What’s alarming in our working environment, as opposed to in the past, is that most...

Just as it can be said that high blood pressure is considered the silent physical killer, so can it be said that the absence of savings can lead to our financial demise.

What’s alarming in our working environment, as opposed to in the past, is that most workers have no pension plans at their jobs. Our present 401K (pension replacement) plans appear to be failing to build accounts adequately.

Today’s workforce must take stock of tough times ahead. There is no question that our society could be on target for a future retirement savings crisis. Let’s look at some very interesting statistics. Savings in our nation are scratching near the ground level of between 1 percent and 2 percent of annual income.

In a recent survey by Thrivent Financial, 36 percent of our adult working population has yet to even start saving for retirement. Add to that another 16 percent of those who have less than $10,000 in any type of retirement fund. That’s more than half the population. And what does it all add up to?

It means today’s young and middle-class workers will have to work beyond what is considered normal retirement, spending their later years in a struggle to make ends meet. But why is it harder for our younger population of today than for their parents of years back?

For starters, traditional pensions are fading away with the threat of Social Security strolling at the end of a cliff. Only one out of five has pension coverage today. And if that’s not enough and you were born after 1960, you’ll now have to wait until age 67 for Social Security.

In addition to the above, we live in a far more expensive society, where middle-class wages have not kept pace with ever-rising middle-class expenses. Add to that the ever-higher cost of houses and college tuition.

These are priority agenda points for families starting out, which greatly retards their ability to enter the arena of early retirement savings.

So how’s business for retirement savings? No one has a crystal ball to see the future of our economy, but here is how I see it. Our aging population will lead to constant rising costs with the increased printing of currency to cover those costs. This will lead to increased inflation, interest rates, taxes and unemployment, equaling reduced benefits.

What to do? Cut your costs and do some serious saving.

Joe Palumbo is the fund manager for The Palco Group Inc., an investment company, and can be reached at palcogroup@aol.com or 718-461-8317.

Posted 7:05 pm, October 10, 2011
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