One does feel a twinge of envy for those born in the late 1930s and 1940s, the so-called Silent Generation. (Silent until you mention entitlement reform, at which point they become the Generation That Will Not Shut Up.) Talk about great timing: too young to fight in the big war, but just old enough to be entering the work force during the great postwar boom. The dream of constant generational improvement did indeed hold — at least up until their time. This no doubt came as a surprise to many of them: Having been born and raised in the shadow of the Great Depression and wartime austerity, it must have been far from obvious to them that they would represent a high-water mark for generational prosperity.
He gives some back-to-basics advice, but it’s something people don’t want to hear because they want to have their cake and eat it too:
Savings is the key to personal and national financial stability, not only because it is the means through which wealth is accumulated over the course of one’s lifetime in order to fund retirement, but for other reasons as well. It provides a cushion against economic turbulence during one’s working years, for example by ensuring that if you lose your job you have the ability to sustain yourself while looking for a new one and the means to relocate for work, which is so often necessary. It means that you have the ability to take advantage of economic conditions, for example by buying a house when prices are low, with a substantial down payment that reduces your interest expenses. It means you can avoid high-interest propositions such as car loans and credit-card financing. Money makes money.
Here’s the full report — The Economic and Financial Status of Older Americans: Trends and Prospects — by William R. Emmons and Bryan J. Noeth, Center for Household Financial Stability Working Paper, Sept. 4, 2013. (Nothing displayed below?)
[pdf width=”100%” height=”1100px”]https://s3.amazonaws.com/2013-wealthcop-PDF/FRB.20130904-Emmons-Noeth.pdf[/pdf]