Professionals predict a coming retirement crisis, and at this time, it’s simply a question of when. These days, it’s more costly than ever to retire, and the basic fact of the matter is the fact that most Americans simply don’t have enough money saved. That trend doesn’t appear to be getting any better either: whether as a result of his explanation or perhaps the rising costs of just living, an increasing number of people haven’t increased the amount they’ve saved compared to this past year.
Fortunately, you can beat the difficulties facing those saving for retirement today, but first it’s advisable to understand the current landscape which makes doing that difficult. Retirement Accounts in Bad Shape – Or Nonexistent
What’s creating the retirement crisis? An alarming amount of Americans are just unprepared for your financial realities of retiring. The executive director of Georgetown University’s Center for Retirement Initiatives, Angela Antonelli, told PBS Frontline that “The the truth is since we examine what people have set aside for retirement today they haven’t put a great deal away if you are age 65.” According to a study from PBS Newshour, nearly 50 % of retirement aged Americans have under $25,000 saved. Worse still, another twenty five percent have less than $1,000 saved.
A Bankrate survey took a glance at American financial security and found some answers. Reporting that Americans didn’t invest in retirement because incomes compared to last year either stayed exactly the same or actually dropped, the survey also cited federal data that shows real wages have barely budged in decades – both major contributors for the retirement crisis.
Touting analysis through the Pew Research Center, the survey continued to state that based on the current average hourly wage, purchasing power is the same today which it is at 1978 after adjusting for inflation. This, alongside increasing housing costs and rising prices for consumer goods signifies that more Americans are feeling the pinch.
Greg McBride, chief financial analyst with Bankrate.com, says that “Stagnant income and rising household expenses mean there is little financial wiggle room for most Americans.”
Benefits of Portfolio Diversification – How could people avoid the retirement crisis? A check here is just one smart strategy. Diversification, defined by Investopedia as “a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories,” the goal of diversification is to maximize return by purchasing different areas that will each react differently to the same event.
That is certainly, possessing a diverse portfolio made up of unrelated investments would offer protection against a volatile market. A dip in the stock exchange, for example, would expose a trader who had diversified their savings into, say, real estate and cryptocurrency, to less risk than a trader who had only committed to mutual funds stocks, and bonds. According to research conducted by Ark Invest and Coinbase, “Bitcoin will be the only asset that maintains consistently low correlations with almost every other asset,” making it a solid candidate for portfolio diversification.
Cryptocurrency and Retirement – Despite market dips, many experts think that the future outlook for crypto is positive. Although it’s now been pushed to early 2019, major players including Starbucks, Microsoft, kuxwkr several others are cooperating to make a major cryptocurrency platform called Bakkt, which experts say is really a giant vote of confidence later on of digital currency. “This is huge news,” CEO of BK Capital Management Brian Kelly told CNBC’s Fast Money. Kelly also manages blockchain-focused BKCM Digital Asset Fund.
“They’re talking about getting this to your 401(K). They’re talking about within your … Fidelity or TD Ameritrade account, you’re going so that you can get a bitcoin ETF, see it here. It expands the universe,” Kelly said.
Using a move that brings cryptocurrency as far in to the mainstream as being a Grande Frappuccino, digital coins gain a degree of institutional trust they didn’t have before, as well as an air of legitimacy among everyday consumers, potentially ultimately causing even more widespread adoption. Will this lead to a steady upward climb for crypto once the correct market corrections settle down, which makes it a safer bet for retirement? Some experts are bullish.
“Traditionally volatility scares most investors regardless of asset class,” Christopher Bates, a former member of the NYSE, told Forbes. “Bakkt will draw resources from reputable companies with knowledge in fields of risk management and technology to produce a federally regulated platform. Once investors feel relaxed trading in a regulated environment volatility should ease.”