I’ve seen some disturbing data points recently:
- 78 percent of American workers report living paycheck to paycheck. This became very visible during the recent government shutdown.
- 40 percent of Americans said they couldn’t cover a $400 unexpected expense without going into debt. That number jumps to 60 percent for a $1,000 expense.
- A record 7 million Americans are 3 months delinquent on their car loans.
- In 2018, student loan debt hit $1.46 trillion and $166 billion of that is seriously delinquent. Both record highs.
- People in their 60s with student loans owe an average of $33,800 in student debt. They owe $86 billion total which is a 161% increase since 2010.
- People over 60 owed $615 billion in credit cards, auto loans, personal loans and student loans as of 2017. That’s an 84% increase since 2010 and the biggest increase of any age group.
- The percentage of bankruptcy filers older than 65 is higher than it’s ever been.
Whatever the reasons, we’re spending too much, saving too little and living on the bleeding edge of financial insecurity. Sure, everyone on Facebook looks like they’re #LivingTheirBestLife, but peer behind the curtains and there’s trouble. To make matters worse, all of this is happening at a point in time when the economy is in relatively good shape, unemployment is at multidecade lows and the stock market is near all-time highs. What happens if/when we have another recession?
I’m going to spend the next several posts discussing these worrisome trends and talking about how you can overhaul your expenses, save more and improve your retirement security. Today, however, I’m just giving you a friendly reminder. The general idea behind retirement is to reach a point of financial independence where work is optional. If you’re not on track for financial independence, you’re doing it wrong. Stay tuned over the next few weeks and I’ll give you some practical ideas on how to get there.