Experts predict a coming retirement crisis, and at this time, it’s just a question of when. Today, it’s more costly than ever before 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 due to see it here or even the rising costs of living, an increasing number of people haven’t increased the amount they’ve saved when compared with a year ago.
Fortunately, it is possible to beat the challenges facing those saving for retirement today, however it’s better to understand the current landscape which makes doing that difficult. Retirement Accounts in Bad Shape – Or Nonexistent
What’s causing the retirement crisis? An alarming amount of Americans are simply unprepared for that financial realities of retiring. The executive director of Georgetown University’s Center for Retirement Initiatives, Angela Antonelli, told PBS Frontline that “The reality is since we take a look at what folks have put away for retirement today they haven’t put a great deal away for those who are age 65.” According to a report from PBS Newshour, nearly one half of retirement aged Americans have under $25,000 saved. Worse still, another twenty 5 percent have under $1,000 saved.
A Bankrate survey took a look at American financial security and located some answers. Reporting that Americans didn’t invest in retirement because incomes compared to this past year either stayed the identical 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 from the Pew Research Center, the survey proceeded to state that based on the current average hourly wage, purchasing power is identical today it is in 1978 after adjusting for inflation. This, alongside increasing housing costs and rising prices for consumer goods implies that more Americans feel 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 steer clear of the retirement crisis? A pop over to these guys is one smart strategy. Diversification, defined by Investopedia as “a technique that reduces risk by allocating investments among various financial instruments, industries, along with other categories,” the goal of diversification would be to maximize return by using different areas that will each react differently towards the same event.
That is, using a diverse portfolio comprised of unrelated investments would offer protection against a volatile market. A dip in the stock market, as an example, would expose a venture capitalist who had diversified their savings into, say, property and cryptocurrency, to less risk than a trader who had only dedicated to mutual funds stocks, and bonds. In accordance with research conducted by Ark Invest and Coinbase, “Bitcoin is definitely the only asset that maintains consistently low correlations with every other asset,” which makes it a solid candidate for portfolio diversification.
Cryptocurrency and Retirement – Despite market dips, many experts think that the long term outlook for crypto is positive. Although it’s now been pushed to early 2019, major players including Starbucks, Microsoft, kuxwkr a couple of others are cooperating to produce a major cryptocurrency platform called Bakkt, which experts say is 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 into your 401(K). They’re talking about within your … Fidelity or TD Ameritrade account, you’re going in order to get a bitcoin ETF, a fantastic read. It expands the universe,” Kelly said.
With a move that brings cryptocurrency as far into the mainstream as being a Grande Frappuccino, digital coins gain a degree of institutional trust they didn’t have before, plus an air of legitimacy among everyday consumers, potentially resulting in a lot more widespread adoption. Will this cause 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 the asset class,” Christopher Bates, a former part of the NYSE, told Forbes. “Bakkt will draw resources from reputable companies with knowledge in fields of risk management and technology to create a federally regulated platform. Once investors feel relaxed trading in a regulated environment volatility should ease.”