Fresh attention is focusing on retirement savings plans structured to help those caught in the middle — above the poverty line, but not financially comfortable.
One reason there are so many people caught in the growing wealth gap is that most in the middle-class lack diversity of assets. In other words, most middle-class families’ main asset is their home; wealthier families spread their savings among stocks, bonds, and housing.
While home ownership is a worthwhile way to build credit, the value of stock and mutual funds have risen much faster than the housing market. Higher-income households tend to hold a higher percentage of these types of assets, which overwhelmingly benefits them.
Another fact that explains the savings gap is that only about 50% of middle-class American families have any retirement savings, and the median value of assets in those accounts is just $25,000. Taking into account those who don’t have any retirement savings, the typical working-age household in the U.S. has just $3,000 saved for retirement.
Most Americans face obstacles to saving more; many recognize that retirement savings are important, but less than half of households have an emergency fund. Saving long-term is out of reach for many people.
One fund set up to address the middle-class crunch is a program called myRA
, a type of conservative, low-yield starter account that you can take advantage of
through the federal Treasury. (This account is not offered through your credit union). The idea is simple, but it could have big impact, in part because these accounts are accessible; account owners can access that money whenever they need without penalty. Once they reach a certain amount, they can be rolled over into other, higher-yield funds.
Middle-class earners have other options, too. Credit union members can call or visit an Investment Representative
, offered through CUSO Financial Services, L.P. (CFS*), at the Uptown Nusenda Credit Union branch for objective and confidential advice on how to handle savings goals.
Try our calculators
to see where you stand and how you can improve your own situation today.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: Are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal. Investment Representatives are registered through CFS. Nusenda Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
Sources: www.theatlantic.com and www.ehow.com
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