Are You Above Average?
How much are Americans really saving? How do you rank? How can you get ahead, and help others?
There is a lot of misunderstanding about how much Americans are saving. New data from Business Insider may be a big wake up call for both individuals and government officials. However, the truth is that benchmarking your own savings and investments against these meager figures can be misleading, and lead to being underprepared for retirement. Then there is the greatest challenge of all; how do you boost your financial situation in time?
5 Dangerous Retirement Myths and Misconceptions
Among the misleading figures that cause many to be underprepared are:
- How much you’ll actually need to retire comfortably
- How much Americans are really saving
- How much of those savings will really be available in retirement
- Realistic rates of return
- The reliability of social security and other sources of pensions
In his recent book ‘Money’ Tony Robbins says most individual investors don’t understand that the rates of return advertised by funds are rarely what they really get, or that rising taxes could easily eat up far more of their nest egg than they imagine. We should all be keenly aware that social security already can’t afford to pay out benefits they owe Americans.
One of the biggest discrepancies of late is average 401k savings versus real average retirement savings. Recent data showing the average 401k balance had hit new highs of around $90k made things sound somewhat positive. But how much do those without 401ks have saved?
The Inside Intel on Retirement Savings
A new report from Business Insider, including data from the Government Accountability Office (GAO), and The Motley Fool.
Key Findings for those aged 55 to 64:
- 41% of Americans have zero retirement savings
- 61% have $0 to $50,000 saved
- Only 9% of Americans have more than $500,000 saved for retirement
- The median saver approaching retirement has just $10k to $20k
- Less than 30% own their homes free of a mortgage
- If you have $730,405 or more save you’ll have more than 90% of the 59% who do have some savings
Unfortunately none of this data is very encouraging. Few would want to retire with less than $1M. Forbes reminds us that if you want to maintain your lifestyle in retirement; a $100k a year income earner may burn through $85k in the first year of retirement. That doesn’t include factoring in higher future tax rates on that money, and the devaluation of the dollar over time. In essence this data suggests less than 9% of Americans can reasonably expect a comfortable retirement. That shouldn’t just be a personal concern for the individuals not on track to their goals. It means 9 out of 10 people you know probably can’t afford to retire either. Unless you are only hanging out in the billionaires club. What does that mean for them, and the economy?
Where Do You Stand?
How are you doing on reaching your savings goals? To retire in comfort you’ll need to at least be in that top 9% bracket. MIT and Harvard professor Robert C. Merton reminds us that even more important than the size of your nest egg or financial statement balance is the passive, spendable income that this capital is generating each year. Otherwise you’ll probably burn through that money decades early.
How big is the gap between where you are, and where you want to be? More importantly how big is the gap between what you are able to save comfortably, and where you need to be? To compound this change financial experts have been warning that we are entering a new era of close to zero returns. Without an ace up your sleeve it is going to be tough to leap ahead, and stay there.
Can Mobile Home Park Investing Help?
Forbes’ verdict is that real estate investing can definitely help Americans prepare for retirement. Given the above data mobile home parks in particular may stand out as one of the best options for bolstering wealth and passive income for retirement.
The perks of mobile home park investing include:
- Ease of generating long term passive income
- Ability to control your own investments and their value
- Long term wealth building
- Tax advantages
There are 3 more significant factors that make this sector a prime choice too:
- Supply and demand
- Ability to get started with limited funds
- Ability to roll over current IRA and 401k funds into mobile home investments
Given the dire lack of financial preparation for retirement it is clear that the demand for affordable mobile homes should only continue to grow in the years ahead.
Individual investors can use self-directed 401ks and IRAs to get started in mobile home park investing with any savings they already have. This together with the fact that creative and seller financing is often available on these investments, in addition to alternative commercial loans provides the ability to get in with limited funds, and without tying up your personal credit.
There are a lot of misconceptions about retirement, and American savings. The data suggests the national situation is far direr than previously thought. Do the math. Find out how much you need to be saving and earning on your investments. Investigate how mobile home park investing may help, and how to get started at it. Then use your supply of mobile homes, and investment savvy to help others to better prepare for and weather retirement in style.